Illinois Senate Bill SB0174 Latest Draft

                            104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB0174 Introduced 1/17/2025, by Sen. Neil Anderson SYNOPSIS AS INTRODUCED: 35 ILCS 5/203 Amends the Illinois Income Tax Act. Creates a deduction in an amount equal to any overtime wages paid to the taxpayer during the taxable year. Effective immediately. LRB104 03806 HLH 13830 b   A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB0174 Introduced 1/17/2025, by Sen. Neil Anderson SYNOPSIS AS INTRODUCED:  35 ILCS 5/203 35 ILCS 5/203  Amends the Illinois Income Tax Act. Creates a deduction in an amount equal to any overtime wages paid to the taxpayer during the taxable year. Effective immediately.  LRB104 03806 HLH 13830 b     LRB104 03806 HLH 13830 b   A BILL FOR
104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB0174 Introduced 1/17/2025, by Sen. Neil Anderson SYNOPSIS AS INTRODUCED:
35 ILCS 5/203 35 ILCS 5/203
35 ILCS 5/203
Amends the Illinois Income Tax Act. Creates a deduction in an amount equal to any overtime wages paid to the taxpayer during the taxable year. Effective immediately.
LRB104 03806 HLH 13830 b     LRB104 03806 HLH 13830 b
    LRB104 03806 HLH 13830 b
A BILL FOR
SB0174LRB104 03806 HLH 13830 b   SB0174  LRB104 03806 HLH 13830 b
  SB0174  LRB104 03806 HLH 13830 b
1  AN ACT concerning revenue.
2  Be it enacted by the People of the State of Illinois,
3  represented in the General Assembly:
4  Section 5. The Illinois Income Tax Act is amended by
5  changing Section 203 as follows:
6  (35 ILCS 5/203)
7  Sec. 203. Base income defined.
8  (a) Individuals.
9  (1) In general. In the case of an individual, base
10  income means an amount equal to the taxpayer's adjusted
11  gross income for the taxable year as modified by paragraph
12  (2).
13  (2) Modifications. The adjusted gross income referred
14  to in paragraph (1) shall be modified by adding thereto
15  the sum of the following amounts:
16  (A) An amount equal to all amounts paid or accrued
17  to the taxpayer as interest or dividends during the
18  taxable year to the extent excluded from gross income
19  in the computation of adjusted gross income, except
20  stock dividends of qualified public utilities
21  described in Section 305(e) of the Internal Revenue
22  Code;
23  (B) An amount equal to the amount of tax imposed by

 

104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB0174 Introduced 1/17/2025, by Sen. Neil Anderson SYNOPSIS AS INTRODUCED:
35 ILCS 5/203 35 ILCS 5/203
35 ILCS 5/203
Amends the Illinois Income Tax Act. Creates a deduction in an amount equal to any overtime wages paid to the taxpayer during the taxable year. Effective immediately.
LRB104 03806 HLH 13830 b     LRB104 03806 HLH 13830 b
    LRB104 03806 HLH 13830 b
A BILL FOR

 

 

35 ILCS 5/203



    LRB104 03806 HLH 13830 b

 

 



 

  SB0174  LRB104 03806 HLH 13830 b


SB0174- 2 -LRB104 03806 HLH 13830 b   SB0174 - 2 - LRB104 03806 HLH 13830 b
  SB0174 - 2 - LRB104 03806 HLH 13830 b
1  this Act to the extent deducted from gross income in
2  the computation of adjusted gross income for the
3  taxable year;
4  (C) An amount equal to the amount received during
5  the taxable year as a recovery or refund of real
6  property taxes paid with respect to the taxpayer's
7  principal residence under the Revenue Act of 1939 and
8  for which a deduction was previously taken under
9  subparagraph (L) of this paragraph (2) prior to July
10  1, 1991, the retrospective application date of Article
11  4 of Public Act 87-17. In the case of multi-unit or
12  multi-use structures and farm dwellings, the taxes on
13  the taxpayer's principal residence shall be that
14  portion of the total taxes for the entire property
15  which is attributable to such principal residence;
16  (D) An amount equal to the amount of the capital
17  gain deduction allowable under the Internal Revenue
18  Code, to the extent deducted from gross income in the
19  computation of adjusted gross income;
20  (D-5) An amount, to the extent not included in
21  adjusted gross income, equal to the amount of money
22  withdrawn by the taxpayer in the taxable year from a
23  medical care savings account and the interest earned
24  on the account in the taxable year of a withdrawal
25  pursuant to subsection (b) of Section 20 of the
26  Medical Care Savings Account Act or subsection (b) of

 

 

  SB0174 - 2 - LRB104 03806 HLH 13830 b


SB0174- 3 -LRB104 03806 HLH 13830 b   SB0174 - 3 - LRB104 03806 HLH 13830 b
  SB0174 - 3 - LRB104 03806 HLH 13830 b
1  Section 20 of the Medical Care Savings Account Act of
2  2000;
3  (D-10) For taxable years ending after December 31,
4  1997, an amount equal to any eligible remediation
5  costs that the individual deducted in computing
6  adjusted gross income and for which the individual
7  claims a credit under subsection (l) of Section 201;
8  (D-15) For taxable years 2001 and thereafter, an
9  amount equal to the bonus depreciation deduction taken
10  on the taxpayer's federal income tax return for the
11  taxable year under subsection (k) of Section 168 of
12  the Internal Revenue Code;
13  (D-16) If the taxpayer sells, transfers, abandons,
14  or otherwise disposes of property for which the
15  taxpayer was required in any taxable year to make an
16  addition modification under subparagraph (D-15), then
17  an amount equal to the aggregate amount of the
18  deductions taken in all taxable years under
19  subparagraph (Z) with respect to that property.
20  If the taxpayer continues to own property through
21  the last day of the last tax year for which a
22  subtraction is allowed with respect to that property
23  under subparagraph (Z) and for which the taxpayer was
24  allowed in any taxable year to make a subtraction
25  modification under subparagraph (Z), then an amount
26  equal to that subtraction modification.

 

 

  SB0174 - 3 - LRB104 03806 HLH 13830 b


SB0174- 4 -LRB104 03806 HLH 13830 b   SB0174 - 4 - LRB104 03806 HLH 13830 b
  SB0174 - 4 - LRB104 03806 HLH 13830 b
1  The taxpayer is required to make the addition
2  modification under this subparagraph only once with
3  respect to any one piece of property;
4  (D-17) An amount equal to the amount otherwise
5  allowed as a deduction in computing base income for
6  interest paid, accrued, or incurred, directly or
7  indirectly, (i) for taxable years ending on or after
8  December 31, 2004, to a foreign person who would be a
9  member of the same unitary business group but for the
10  fact that foreign person's business activity outside
11  the United States is 80% or more of the foreign
12  person's total business activity and (ii) for taxable
13  years ending on or after December 31, 2008, to a person
14  who would be a member of the same unitary business
15  group but for the fact that the person is prohibited
16  under Section 1501(a)(27) from being included in the
17  unitary business group because he or she is ordinarily
18  required to apportion business income under different
19  subsections of Section 304. The addition modification
20  required by this subparagraph shall be reduced to the
21  extent that dividends were included in base income of
22  the unitary group for the same taxable year and
23  received by the taxpayer or by a member of the
24  taxpayer's unitary business group (including amounts
25  included in gross income under Sections 951 through
26  964 of the Internal Revenue Code and amounts included

 

 

  SB0174 - 4 - LRB104 03806 HLH 13830 b


SB0174- 5 -LRB104 03806 HLH 13830 b   SB0174 - 5 - LRB104 03806 HLH 13830 b
  SB0174 - 5 - LRB104 03806 HLH 13830 b
1  in gross income under Section 78 of the Internal
2  Revenue Code) with respect to the stock of the same
3  person to whom the interest was paid, accrued, or
4  incurred.
5  This paragraph shall not apply to the following:
6  (i) an item of interest paid, accrued, or
7  incurred, directly or indirectly, to a person who
8  is subject in a foreign country or state, other
9  than a state which requires mandatory unitary
10  reporting, to a tax on or measured by net income
11  with respect to such interest; or
12  (ii) an item of interest paid, accrued, or
13  incurred, directly or indirectly, to a person if
14  the taxpayer can establish, based on a
15  preponderance of the evidence, both of the
16  following:
17  (a) the person, during the same taxable
18  year, paid, accrued, or incurred, the interest
19  to a person that is not a related member, and
20  (b) the transaction giving rise to the
21  interest expense between the taxpayer and the
22  person did not have as a principal purpose the
23  avoidance of Illinois income tax, and is paid
24  pursuant to a contract or agreement that
25  reflects an arm's-length interest rate and
26  terms; or

 

 

  SB0174 - 5 - LRB104 03806 HLH 13830 b


SB0174- 6 -LRB104 03806 HLH 13830 b   SB0174 - 6 - LRB104 03806 HLH 13830 b
  SB0174 - 6 - LRB104 03806 HLH 13830 b
1  (iii) the taxpayer can establish, based on
2  clear and convincing evidence, that the interest
3  paid, accrued, or incurred relates to a contract
4  or agreement entered into at arm's-length rates
5  and terms and the principal purpose for the
6  payment is not federal or Illinois tax avoidance;
7  or
8  (iv) an item of interest paid, accrued, or
9  incurred, directly or indirectly, to a person if
10  the taxpayer establishes by clear and convincing
11  evidence that the adjustments are unreasonable; or
12  if the taxpayer and the Director agree in writing
13  to the application or use of an alternative method
14  of apportionment under Section 304(f).
15  Nothing in this subsection shall preclude the
16  Director from making any other adjustment
17  otherwise allowed under Section 404 of this Act
18  for any tax year beginning after the effective
19  date of this amendment provided such adjustment is
20  made pursuant to regulation adopted by the
21  Department and such regulations provide methods
22  and standards by which the Department will utilize
23  its authority under Section 404 of this Act;
24  (D-18) An amount equal to the amount of intangible
25  expenses and costs otherwise allowed as a deduction in
26  computing base income, and that were paid, accrued, or

 

 

  SB0174 - 6 - LRB104 03806 HLH 13830 b


SB0174- 7 -LRB104 03806 HLH 13830 b   SB0174 - 7 - LRB104 03806 HLH 13830 b
  SB0174 - 7 - LRB104 03806 HLH 13830 b
1  incurred, directly or indirectly, (i) for taxable
2  years ending on or after December 31, 2004, to a
3  foreign person who would be a member of the same
4  unitary business group but for the fact that the
5  foreign person's business activity outside the United
6  States is 80% or more of that person's total business
7  activity and (ii) for taxable years ending on or after
8  December 31, 2008, to a person who would be a member of
9  the same unitary business group but for the fact that
10  the person is prohibited under Section 1501(a)(27)
11  from being included in the unitary business group
12  because he or she is ordinarily required to apportion
13  business income under different subsections of Section
14  304. The addition modification required by this
15  subparagraph shall be reduced to the extent that
16  dividends were included in base income of the unitary
17  group for the same taxable year and received by the
18  taxpayer or by a member of the taxpayer's unitary
19  business group (including amounts included in gross
20  income under Sections 951 through 964 of the Internal
21  Revenue Code and amounts included in gross income
22  under Section 78 of the Internal Revenue Code) with
23  respect to the stock of the same person to whom the
24  intangible expenses and costs were directly or
25  indirectly paid, incurred, or accrued. The preceding
26  sentence does not apply to the extent that the same

 

 

  SB0174 - 7 - LRB104 03806 HLH 13830 b


SB0174- 8 -LRB104 03806 HLH 13830 b   SB0174 - 8 - LRB104 03806 HLH 13830 b
  SB0174 - 8 - LRB104 03806 HLH 13830 b
1  dividends caused a reduction to the addition
2  modification required under Section 203(a)(2)(D-17) of
3  this Act. As used in this subparagraph, the term
4  "intangible expenses and costs" includes (1) expenses,
5  losses, and costs for, or related to, the direct or
6  indirect acquisition, use, maintenance or management,
7  ownership, sale, exchange, or any other disposition of
8  intangible property; (2) losses incurred, directly or
9  indirectly, from factoring transactions or discounting
10  transactions; (3) royalty, patent, technical, and
11  copyright fees; (4) licensing fees; and (5) other
12  similar expenses and costs. For purposes of this
13  subparagraph, "intangible property" includes patents,
14  patent applications, trade names, trademarks, service
15  marks, copyrights, mask works, trade secrets, and
16  similar types of intangible assets.
17  This paragraph shall not apply to the following:
18  (i) any item of intangible expenses or costs
19  paid, accrued, or incurred, directly or
20  indirectly, from a transaction with a person who
21  is subject in a foreign country or state, other
22  than a state which requires mandatory unitary
23  reporting, to a tax on or measured by net income
24  with respect to such item; or
25  (ii) any item of intangible expense or cost
26  paid, accrued, or incurred, directly or

 

 

  SB0174 - 8 - LRB104 03806 HLH 13830 b


SB0174- 9 -LRB104 03806 HLH 13830 b   SB0174 - 9 - LRB104 03806 HLH 13830 b
  SB0174 - 9 - LRB104 03806 HLH 13830 b
1  indirectly, if the taxpayer can establish, based
2  on a preponderance of the evidence, both of the
3  following:
4  (a) the person during the same taxable
5  year paid, accrued, or incurred, the
6  intangible expense or cost to a person that is
7  not a related member, and
8  (b) the transaction giving rise to the
9  intangible expense or cost between the
10  taxpayer and the person did not have as a
11  principal purpose the avoidance of Illinois
12  income tax, and is paid pursuant to a contract
13  or agreement that reflects arm's-length terms;
14  or
15  (iii) any item of intangible expense or cost
16  paid, accrued, or incurred, directly or
17  indirectly, from a transaction with a person if
18  the taxpayer establishes by clear and convincing
19  evidence, that the adjustments are unreasonable;
20  or if the taxpayer and the Director agree in
21  writing to the application or use of an
22  alternative method of apportionment under Section
23  304(f);
24  Nothing in this subsection shall preclude the
25  Director from making any other adjustment
26  otherwise allowed under Section 404 of this Act

 

 

  SB0174 - 9 - LRB104 03806 HLH 13830 b


SB0174- 10 -LRB104 03806 HLH 13830 b   SB0174 - 10 - LRB104 03806 HLH 13830 b
  SB0174 - 10 - LRB104 03806 HLH 13830 b
1  for any tax year beginning after the effective
2  date of this amendment provided such adjustment is
3  made pursuant to regulation adopted by the
4  Department and such regulations provide methods
5  and standards by which the Department will utilize
6  its authority under Section 404 of this Act;
7  (D-19) For taxable years ending on or after
8  December 31, 2008, an amount equal to the amount of
9  insurance premium expenses and costs otherwise allowed
10  as a deduction in computing base income, and that were
11  paid, accrued, or incurred, directly or indirectly, to
12  a person who would be a member of the same unitary
13  business group but for the fact that the person is
14  prohibited under Section 1501(a)(27) from being
15  included in the unitary business group because he or
16  she is ordinarily required to apportion business
17  income under different subsections of Section 304. The
18  addition modification required by this subparagraph
19  shall be reduced to the extent that dividends were
20  included in base income of the unitary group for the
21  same taxable year and received by the taxpayer or by a
22  member of the taxpayer's unitary business group
23  (including amounts included in gross income under
24  Sections 951 through 964 of the Internal Revenue Code
25  and amounts included in gross income under Section 78
26  of the Internal Revenue Code) with respect to the

 

 

  SB0174 - 10 - LRB104 03806 HLH 13830 b


SB0174- 11 -LRB104 03806 HLH 13830 b   SB0174 - 11 - LRB104 03806 HLH 13830 b
  SB0174 - 11 - LRB104 03806 HLH 13830 b
1  stock of the same person to whom the premiums and costs
2  were directly or indirectly paid, incurred, or
3  accrued. The preceding sentence does not apply to the
4  extent that the same dividends caused a reduction to
5  the addition modification required under Section
6  203(a)(2)(D-17) or Section 203(a)(2)(D-18) of this
7  Act;
8  (D-20) For taxable years beginning on or after
9  January 1, 2002 and ending on or before December 31,
10  2006, in the case of a distribution from a qualified
11  tuition program under Section 529 of the Internal
12  Revenue Code, other than (i) a distribution from a
13  College Savings Pool created under Section 16.5 of the
14  State Treasurer Act or (ii) a distribution from the
15  Illinois Prepaid Tuition Trust Fund, an amount equal
16  to the amount excluded from gross income under Section
17  529(c)(3)(B). For taxable years beginning on or after
18  January 1, 2007, in the case of a distribution from a
19  qualified tuition program under Section 529 of the
20  Internal Revenue Code, other than (i) a distribution
21  from a College Savings Pool created under Section 16.5
22  of the State Treasurer Act, (ii) a distribution from
23  the Illinois Prepaid Tuition Trust Fund, or (iii) a
24  distribution from a qualified tuition program under
25  Section 529 of the Internal Revenue Code that (I)
26  adopts and determines that its offering materials

 

 

  SB0174 - 11 - LRB104 03806 HLH 13830 b


SB0174- 12 -LRB104 03806 HLH 13830 b   SB0174 - 12 - LRB104 03806 HLH 13830 b
  SB0174 - 12 - LRB104 03806 HLH 13830 b
1  comply with the College Savings Plans Network's
2  disclosure principles and (II) has made reasonable
3  efforts to inform in-state residents of the existence
4  of in-state qualified tuition programs by informing
5  Illinois residents directly and, where applicable, to
6  inform financial intermediaries distributing the
7  program to inform in-state residents of the existence
8  of in-state qualified tuition programs at least
9  annually, an amount equal to the amount excluded from
10  gross income under Section 529(c)(3)(B).
11  For the purposes of this subparagraph (D-20), a
12  qualified tuition program has made reasonable efforts
13  if it makes disclosures (which may use the term
14  "in-state program" or "in-state plan" and need not
15  specifically refer to Illinois or its qualified
16  programs by name) (i) directly to prospective
17  participants in its offering materials or makes a
18  public disclosure, such as a website posting; and (ii)
19  where applicable, to intermediaries selling the
20  out-of-state program in the same manner that the
21  out-of-state program distributes its offering
22  materials;
23  (D-20.5) For taxable years beginning on or after
24  January 1, 2018, in the case of a distribution from a
25  qualified ABLE program under Section 529A of the
26  Internal Revenue Code, other than a distribution from

 

 

  SB0174 - 12 - LRB104 03806 HLH 13830 b


SB0174- 13 -LRB104 03806 HLH 13830 b   SB0174 - 13 - LRB104 03806 HLH 13830 b
  SB0174 - 13 - LRB104 03806 HLH 13830 b
1  a qualified ABLE program created under Section 16.6 of
2  the State Treasurer Act, an amount equal to the amount
3  excluded from gross income under Section 529A(c)(1)(B)
4  of the Internal Revenue Code;
5  (D-21) For taxable years beginning on or after
6  January 1, 2007, in the case of transfer of moneys from
7  a qualified tuition program under Section 529 of the
8  Internal Revenue Code that is administered by the
9  State to an out-of-state program, an amount equal to
10  the amount of moneys previously deducted from base
11  income under subsection (a)(2)(Y) of this Section;
12  (D-21.5) For taxable years beginning on or after
13  January 1, 2018, in the case of the transfer of moneys
14  from a qualified tuition program under Section 529 or
15  a qualified ABLE program under Section 529A of the
16  Internal Revenue Code that is administered by this
17  State to an ABLE account established under an
18  out-of-state ABLE account program, an amount equal to
19  the contribution component of the transferred amount
20  that was previously deducted from base income under
21  subsection (a)(2)(Y) or subsection (a)(2)(HH) of this
22  Section;
23  (D-22) For taxable years beginning on or after
24  January 1, 2009, and prior to January 1, 2018, in the
25  case of a nonqualified withdrawal or refund of moneys
26  from a qualified tuition program under Section 529 of

 

 

  SB0174 - 13 - LRB104 03806 HLH 13830 b


SB0174- 14 -LRB104 03806 HLH 13830 b   SB0174 - 14 - LRB104 03806 HLH 13830 b
  SB0174 - 14 - LRB104 03806 HLH 13830 b
1  the Internal Revenue Code administered by the State
2  that is not used for qualified expenses at an eligible
3  education institution, an amount equal to the
4  contribution component of the nonqualified withdrawal
5  or refund that was previously deducted from base
6  income under subsection (a)(2)(y) of this Section,
7  provided that the withdrawal or refund did not result
8  from the beneficiary's death or disability. For
9  taxable years beginning on or after January 1, 2018:
10  (1) in the case of a nonqualified withdrawal or
11  refund, as defined under Section 16.5 of the State
12  Treasurer Act, of moneys from a qualified tuition
13  program under Section 529 of the Internal Revenue Code
14  administered by the State, an amount equal to the
15  contribution component of the nonqualified withdrawal
16  or refund that was previously deducted from base
17  income under subsection (a)(2)(Y) of this Section, and
18  (2) in the case of a nonqualified withdrawal or refund
19  from a qualified ABLE program under Section 529A of
20  the Internal Revenue Code administered by the State
21  that is not used for qualified disability expenses, an
22  amount equal to the contribution component of the
23  nonqualified withdrawal or refund that was previously
24  deducted from base income under subsection (a)(2)(HH)
25  of this Section;
26  (D-23) An amount equal to the credit allowable to

 

 

  SB0174 - 14 - LRB104 03806 HLH 13830 b


SB0174- 15 -LRB104 03806 HLH 13830 b   SB0174 - 15 - LRB104 03806 HLH 13830 b
  SB0174 - 15 - LRB104 03806 HLH 13830 b
1  the taxpayer under Section 218(a) of this Act,
2  determined without regard to Section 218(c) of this
3  Act;
4  (D-24) For taxable years ending on or after
5  December 31, 2017, an amount equal to the deduction
6  allowed under Section 199 of the Internal Revenue Code
7  for the taxable year;
8  (D-25) In the case of a resident, an amount equal
9  to the amount of tax for which a credit is allowed
10  pursuant to Section 201(p)(7) of this Act;
11  and by deducting from the total so obtained the sum of the
12  following amounts:
13  (E) For taxable years ending before December 31,
14  2001, any amount included in such total in respect of
15  any compensation (including but not limited to any
16  compensation paid or accrued to a serviceman while a
17  prisoner of war or missing in action) paid to a
18  resident by reason of being on active duty in the Armed
19  Forces of the United States and in respect of any
20  compensation paid or accrued to a resident who as a
21  governmental employee was a prisoner of war or missing
22  in action, and in respect of any compensation paid to a
23  resident in 1971 or thereafter for annual training
24  performed pursuant to Sections 502 and 503, Title 32,
25  United States Code as a member of the Illinois
26  National Guard or, beginning with taxable years ending

 

 

  SB0174 - 15 - LRB104 03806 HLH 13830 b


SB0174- 16 -LRB104 03806 HLH 13830 b   SB0174 - 16 - LRB104 03806 HLH 13830 b
  SB0174 - 16 - LRB104 03806 HLH 13830 b
1  on or after December 31, 2007, the National Guard of
2  any other state. For taxable years ending on or after
3  December 31, 2001, any amount included in such total
4  in respect of any compensation (including but not
5  limited to any compensation paid or accrued to a
6  serviceman while a prisoner of war or missing in
7  action) paid to a resident by reason of being a member
8  of any component of the Armed Forces of the United
9  States and in respect of any compensation paid or
10  accrued to a resident who as a governmental employee
11  was a prisoner of war or missing in action, and in
12  respect of any compensation paid to a resident in 2001
13  or thereafter by reason of being a member of the
14  Illinois National Guard or, beginning with taxable
15  years ending on or after December 31, 2007, the
16  National Guard of any other state. The provisions of
17  this subparagraph (E) are exempt from the provisions
18  of Section 250;
19  (F) An amount equal to all amounts included in
20  such total pursuant to the provisions of Sections
21  402(a), 402(c), 403(a), 403(b), 406(a), 407(a), and
22  408 of the Internal Revenue Code, or included in such
23  total as distributions under the provisions of any
24  retirement or disability plan for employees of any
25  governmental agency or unit, or retirement payments to
26  retired partners, which payments are excluded in

 

 

  SB0174 - 16 - LRB104 03806 HLH 13830 b


SB0174- 17 -LRB104 03806 HLH 13830 b   SB0174 - 17 - LRB104 03806 HLH 13830 b
  SB0174 - 17 - LRB104 03806 HLH 13830 b
1  computing net earnings from self employment by Section
2  1402 of the Internal Revenue Code and regulations
3  adopted pursuant thereto;
4  (G) The valuation limitation amount;
5  (H) An amount equal to the amount of any tax
6  imposed by this Act which was refunded to the taxpayer
7  and included in such total for the taxable year;
8  (I) An amount equal to all amounts included in
9  such total pursuant to the provisions of Section 111
10  of the Internal Revenue Code as a recovery of items
11  previously deducted from adjusted gross income in the
12  computation of taxable income;
13  (J) An amount equal to those dividends included in
14  such total which were paid by a corporation which
15  conducts business operations in a River Edge
16  Redevelopment Zone or zones created under the River
17  Edge Redevelopment Zone Act, and conducts
18  substantially all of its operations in a River Edge
19  Redevelopment Zone or zones. This subparagraph (J) is
20  exempt from the provisions of Section 250;
21  (K) An amount equal to those dividends included in
22  such total that were paid by a corporation that
23  conducts business operations in a federally designated
24  Foreign Trade Zone or Sub-Zone and that is designated
25  a High Impact Business located in Illinois; provided
26  that dividends eligible for the deduction provided in

 

 

  SB0174 - 17 - LRB104 03806 HLH 13830 b


SB0174- 18 -LRB104 03806 HLH 13830 b   SB0174 - 18 - LRB104 03806 HLH 13830 b
  SB0174 - 18 - LRB104 03806 HLH 13830 b
1  subparagraph (J) of paragraph (2) of this subsection
2  shall not be eligible for the deduction provided under
3  this subparagraph (K);
4  (L) For taxable years ending after December 31,
5  1983, an amount equal to all social security benefits
6  and railroad retirement benefits included in such
7  total pursuant to Sections 72(r) and 86 of the
8  Internal Revenue Code;
9  (M) With the exception of any amounts subtracted
10  under subparagraph (N), an amount equal to the sum of
11  all amounts disallowed as deductions by (i) Sections
12  171(a)(2) and 265(a)(2) of the Internal Revenue Code,
13  and all amounts of expenses allocable to interest and
14  disallowed as deductions by Section 265(a)(1) of the
15  Internal Revenue Code; and (ii) for taxable years
16  ending on or after August 13, 1999, Sections
17  171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
18  Internal Revenue Code, plus, for taxable years ending
19  on or after December 31, 2011, Section 45G(e)(3) of
20  the Internal Revenue Code and, for taxable years
21  ending on or after December 31, 2008, any amount
22  included in gross income under Section 87 of the
23  Internal Revenue Code; the provisions of this
24  subparagraph are exempt from the provisions of Section
25  250;
26  (N) An amount equal to all amounts included in

 

 

  SB0174 - 18 - LRB104 03806 HLH 13830 b


SB0174- 19 -LRB104 03806 HLH 13830 b   SB0174 - 19 - LRB104 03806 HLH 13830 b
  SB0174 - 19 - LRB104 03806 HLH 13830 b
1  such total which are exempt from taxation by this
2  State either by reason of its statutes or Constitution
3  or by reason of the Constitution, treaties or statutes
4  of the United States; provided that, in the case of any
5  statute of this State that exempts income derived from
6  bonds or other obligations from the tax imposed under
7  this Act, the amount exempted shall be the interest
8  net of bond premium amortization;
9  (O) An amount equal to any contribution made to a
10  job training project established pursuant to the Tax
11  Increment Allocation Redevelopment Act;
12  (P) An amount equal to the amount of the deduction
13  used to compute the federal income tax credit for
14  restoration of substantial amounts held under claim of
15  right for the taxable year pursuant to Section 1341 of
16  the Internal Revenue Code or of any itemized deduction
17  taken from adjusted gross income in the computation of
18  taxable income for restoration of substantial amounts
19  held under claim of right for the taxable year;
20  (Q) An amount equal to any amounts included in
21  such total, received by the taxpayer as an
22  acceleration in the payment of life, endowment or
23  annuity benefits in advance of the time they would
24  otherwise be payable as an indemnity for a terminal
25  illness;
26  (R) An amount equal to the amount of any federal or

 

 

  SB0174 - 19 - LRB104 03806 HLH 13830 b


SB0174- 20 -LRB104 03806 HLH 13830 b   SB0174 - 20 - LRB104 03806 HLH 13830 b
  SB0174 - 20 - LRB104 03806 HLH 13830 b
1  State bonus paid to veterans of the Persian Gulf War;
2  (S) An amount, to the extent included in adjusted
3  gross income, equal to the amount of a contribution
4  made in the taxable year on behalf of the taxpayer to a
5  medical care savings account established under the
6  Medical Care Savings Account Act or the Medical Care
7  Savings Account Act of 2000 to the extent the
8  contribution is accepted by the account administrator
9  as provided in that Act;
10  (T) An amount, to the extent included in adjusted
11  gross income, equal to the amount of interest earned
12  in the taxable year on a medical care savings account
13  established under the Medical Care Savings Account Act
14  or the Medical Care Savings Account Act of 2000 on
15  behalf of the taxpayer, other than interest added
16  pursuant to item (D-5) of this paragraph (2);
17  (U) For one taxable year beginning on or after
18  January 1, 1994, an amount equal to the total amount of
19  tax imposed and paid under subsections (a) and (b) of
20  Section 201 of this Act on grant amounts received by
21  the taxpayer under the Nursing Home Grant Assistance
22  Act during the taxpayer's taxable years 1992 and 1993;
23  (V) Beginning with tax years ending on or after
24  December 31, 1995 and ending with tax years ending on
25  or before December 31, 2004, an amount equal to the
26  amount paid by a taxpayer who is a self-employed

 

 

  SB0174 - 20 - LRB104 03806 HLH 13830 b


SB0174- 21 -LRB104 03806 HLH 13830 b   SB0174 - 21 - LRB104 03806 HLH 13830 b
  SB0174 - 21 - LRB104 03806 HLH 13830 b
1  taxpayer, a partner of a partnership, or a shareholder
2  in a Subchapter S corporation for health insurance or
3  long-term care insurance for that taxpayer or that
4  taxpayer's spouse or dependents, to the extent that
5  the amount paid for that health insurance or long-term
6  care insurance may be deducted under Section 213 of
7  the Internal Revenue Code, has not been deducted on
8  the federal income tax return of the taxpayer, and
9  does not exceed the taxable income attributable to
10  that taxpayer's income, self-employment income, or
11  Subchapter S corporation income; except that no
12  deduction shall be allowed under this item (V) if the
13  taxpayer is eligible to participate in any health
14  insurance or long-term care insurance plan of an
15  employer of the taxpayer or the taxpayer's spouse. The
16  amount of the health insurance and long-term care
17  insurance subtracted under this item (V) shall be
18  determined by multiplying total health insurance and
19  long-term care insurance premiums paid by the taxpayer
20  times a number that represents the fractional
21  percentage of eligible medical expenses under Section
22  213 of the Internal Revenue Code of 1986 not actually
23  deducted on the taxpayer's federal income tax return;
24  (W) For taxable years beginning on or after
25  January 1, 1998, all amounts included in the
26  taxpayer's federal gross income in the taxable year

 

 

  SB0174 - 21 - LRB104 03806 HLH 13830 b


SB0174- 22 -LRB104 03806 HLH 13830 b   SB0174 - 22 - LRB104 03806 HLH 13830 b
  SB0174 - 22 - LRB104 03806 HLH 13830 b
1  from amounts converted from a regular IRA to a Roth
2  IRA. This paragraph is exempt from the provisions of
3  Section 250;
4  (X) For taxable year 1999 and thereafter, an
5  amount equal to the amount of any (i) distributions,
6  to the extent includible in gross income for federal
7  income tax purposes, made to the taxpayer because of
8  his or her status as a victim of persecution for racial
9  or religious reasons by Nazi Germany or any other Axis
10  regime or as an heir of the victim and (ii) items of
11  income, to the extent includible in gross income for
12  federal income tax purposes, attributable to, derived
13  from or in any way related to assets stolen from,
14  hidden from, or otherwise lost to a victim of
15  persecution for racial or religious reasons by Nazi
16  Germany or any other Axis regime immediately prior to,
17  during, and immediately after World War II, including,
18  but not limited to, interest on the proceeds
19  receivable as insurance under policies issued to a
20  victim of persecution for racial or religious reasons
21  by Nazi Germany or any other Axis regime by European
22  insurance companies immediately prior to and during
23  World War II; provided, however, this subtraction from
24  federal adjusted gross income does not apply to assets
25  acquired with such assets or with the proceeds from
26  the sale of such assets; provided, further, this

 

 

  SB0174 - 22 - LRB104 03806 HLH 13830 b


SB0174- 23 -LRB104 03806 HLH 13830 b   SB0174 - 23 - LRB104 03806 HLH 13830 b
  SB0174 - 23 - LRB104 03806 HLH 13830 b
1  paragraph shall only apply to a taxpayer who was the
2  first recipient of such assets after their recovery
3  and who is a victim of persecution for racial or
4  religious reasons by Nazi Germany or any other Axis
5  regime or as an heir of the victim. The amount of and
6  the eligibility for any public assistance, benefit, or
7  similar entitlement is not affected by the inclusion
8  of items (i) and (ii) of this paragraph in gross income
9  for federal income tax purposes. This paragraph is
10  exempt from the provisions of Section 250;
11  (Y) For taxable years beginning on or after
12  January 1, 2002 and ending on or before December 31,
13  2004, moneys contributed in the taxable year to a
14  College Savings Pool account under Section 16.5 of the
15  State Treasurer Act, except that amounts excluded from
16  gross income under Section 529(c)(3)(C)(i) of the
17  Internal Revenue Code shall not be considered moneys
18  contributed under this subparagraph (Y). For taxable
19  years beginning on or after January 1, 2005, a maximum
20  of $10,000 contributed in the taxable year to (i) a
21  College Savings Pool account under Section 16.5 of the
22  State Treasurer Act or (ii) the Illinois Prepaid
23  Tuition Trust Fund, except that amounts excluded from
24  gross income under Section 529(c)(3)(C)(i) of the
25  Internal Revenue Code shall not be considered moneys
26  contributed under this subparagraph (Y). For purposes

 

 

  SB0174 - 23 - LRB104 03806 HLH 13830 b


SB0174- 24 -LRB104 03806 HLH 13830 b   SB0174 - 24 - LRB104 03806 HLH 13830 b
  SB0174 - 24 - LRB104 03806 HLH 13830 b
1  of this subparagraph, contributions made by an
2  employer on behalf of an employee, or matching
3  contributions made by an employee, shall be treated as
4  made by the employee. This subparagraph (Y) is exempt
5  from the provisions of Section 250;
6  (Z) For taxable years 2001 and thereafter, for the
7  taxable year in which the bonus depreciation deduction
8  is taken on the taxpayer's federal income tax return
9  under subsection (k) of Section 168 of the Internal
10  Revenue Code and for each applicable taxable year
11  thereafter, an amount equal to "x", where:
12  (1) "y" equals the amount of the depreciation
13  deduction taken for the taxable year on the
14  taxpayer's federal income tax return on property
15  for which the bonus depreciation deduction was
16  taken in any year under subsection (k) of Section
17  168 of the Internal Revenue Code, but not
18  including the bonus depreciation deduction;
19  (2) for taxable years ending on or before
20  December 31, 2005, "x" equals "y" multiplied by 30
21  and then divided by 70 (or "y" multiplied by
22  0.429); and
23  (3) for taxable years ending after December
24  31, 2005:
25  (i) for property on which a bonus
26  depreciation deduction of 30% of the adjusted

 

 

  SB0174 - 24 - LRB104 03806 HLH 13830 b


SB0174- 25 -LRB104 03806 HLH 13830 b   SB0174 - 25 - LRB104 03806 HLH 13830 b
  SB0174 - 25 - LRB104 03806 HLH 13830 b
1  basis was taken, "x" equals "y" multiplied by
2  30 and then divided by 70 (or "y" multiplied
3  by 0.429);
4  (ii) for property on which a bonus
5  depreciation deduction of 50% of the adjusted
6  basis was taken, "x" equals "y" multiplied by
7  1.0;
8  (iii) for property on which a bonus
9  depreciation deduction of 100% of the adjusted
10  basis was taken in a taxable year ending on or
11  after December 31, 2021, "x" equals the
12  depreciation deduction that would be allowed
13  on that property if the taxpayer had made the
14  election under Section 168(k)(7) of the
15  Internal Revenue Code to not claim bonus
16  depreciation on that property; and
17  (iv) for property on which a bonus
18  depreciation deduction of a percentage other
19  than 30%, 50% or 100% of the adjusted basis
20  was taken in a taxable year ending on or after
21  December 31, 2021, "x" equals "y" multiplied
22  by 100 times the percentage bonus depreciation
23  on the property (that is, 100(bonus%)) and
24  then divided by 100 times 1 minus the
25  percentage bonus depreciation on the property
26  (that is, 100(1-bonus%)).

 

 

  SB0174 - 25 - LRB104 03806 HLH 13830 b


SB0174- 26 -LRB104 03806 HLH 13830 b   SB0174 - 26 - LRB104 03806 HLH 13830 b
  SB0174 - 26 - LRB104 03806 HLH 13830 b
1  The aggregate amount deducted under this
2  subparagraph in all taxable years for any one piece of
3  property may not exceed the amount of the bonus
4  depreciation deduction taken on that property on the
5  taxpayer's federal income tax return under subsection
6  (k) of Section 168 of the Internal Revenue Code. This
7  subparagraph (Z) is exempt from the provisions of
8  Section 250;
9  (AA) If the taxpayer sells, transfers, abandons,
10  or otherwise disposes of property for which the
11  taxpayer was required in any taxable year to make an
12  addition modification under subparagraph (D-15), then
13  an amount equal to that addition modification.
14  If the taxpayer continues to own property through
15  the last day of the last tax year for which a
16  subtraction is allowed with respect to that property
17  under subparagraph (Z) and for which the taxpayer was
18  required in any taxable year to make an addition
19  modification under subparagraph (D-15), then an amount
20  equal to that addition modification.
21  The taxpayer is allowed to take the deduction
22  under this subparagraph only once with respect to any
23  one piece of property.
24  This subparagraph (AA) is exempt from the
25  provisions of Section 250;
26  (BB) Any amount included in adjusted gross income,

 

 

  SB0174 - 26 - LRB104 03806 HLH 13830 b


SB0174- 27 -LRB104 03806 HLH 13830 b   SB0174 - 27 - LRB104 03806 HLH 13830 b
  SB0174 - 27 - LRB104 03806 HLH 13830 b
1  other than salary, received by a driver in a
2  ridesharing arrangement using a motor vehicle;
3  (CC) The amount of (i) any interest income (net of
4  the deductions allocable thereto) taken into account
5  for the taxable year with respect to a transaction
6  with a taxpayer that is required to make an addition
7  modification with respect to such transaction under
8  Section 203(a)(2)(D-17), 203(b)(2)(E-12),
9  203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
10  the amount of that addition modification, and (ii) any
11  income from intangible property (net of the deductions
12  allocable thereto) taken into account for the taxable
13  year with respect to a transaction with a taxpayer
14  that is required to make an addition modification with
15  respect to such transaction under Section
16  203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
17  203(d)(2)(D-8), but not to exceed the amount of that
18  addition modification. This subparagraph (CC) is
19  exempt from the provisions of Section 250;
20  (DD) An amount equal to the interest income taken
21  into account for the taxable year (net of the
22  deductions allocable thereto) with respect to
23  transactions with (i) a foreign person who would be a
24  member of the taxpayer's unitary business group but
25  for the fact that the foreign person's business
26  activity outside the United States is 80% or more of

 

 

  SB0174 - 27 - LRB104 03806 HLH 13830 b


SB0174- 28 -LRB104 03806 HLH 13830 b   SB0174 - 28 - LRB104 03806 HLH 13830 b
  SB0174 - 28 - LRB104 03806 HLH 13830 b
1  that person's total business activity and (ii) for
2  taxable years ending on or after December 31, 2008, to
3  a person who would be a member of the same unitary
4  business group but for the fact that the person is
5  prohibited under Section 1501(a)(27) from being
6  included in the unitary business group because he or
7  she is ordinarily required to apportion business
8  income under different subsections of Section 304, but
9  not to exceed the addition modification required to be
10  made for the same taxable year under Section
11  203(a)(2)(D-17) for interest paid, accrued, or
12  incurred, directly or indirectly, to the same person.
13  This subparagraph (DD) is exempt from the provisions
14  of Section 250;
15  (EE) An amount equal to the income from intangible
16  property taken into account for the taxable year (net
17  of the deductions allocable thereto) with respect to
18  transactions with (i) a foreign person who would be a
19  member of the taxpayer's unitary business group but
20  for the fact that the foreign person's business
21  activity outside the United States is 80% or more of
22  that person's total business activity and (ii) for
23  taxable years ending on or after December 31, 2008, to
24  a person who would be a member of the same unitary
25  business group but for the fact that the person is
26  prohibited under Section 1501(a)(27) from being

 

 

  SB0174 - 28 - LRB104 03806 HLH 13830 b


SB0174- 29 -LRB104 03806 HLH 13830 b   SB0174 - 29 - LRB104 03806 HLH 13830 b
  SB0174 - 29 - LRB104 03806 HLH 13830 b
1  included in the unitary business group because he or
2  she is ordinarily required to apportion business
3  income under different subsections of Section 304, but
4  not to exceed the addition modification required to be
5  made for the same taxable year under Section
6  203(a)(2)(D-18) for intangible expenses and costs
7  paid, accrued, or incurred, directly or indirectly, to
8  the same foreign person. This subparagraph (EE) is
9  exempt from the provisions of Section 250;
10  (FF) An amount equal to any amount awarded to the
11  taxpayer during the taxable year by the Court of
12  Claims under subsection (c) of Section 8 of the Court
13  of Claims Act for time unjustly served in a State
14  prison. This subparagraph (FF) is exempt from the
15  provisions of Section 250;
16  (GG) For taxable years ending on or after December
17  31, 2011, in the case of a taxpayer who was required to
18  add back any insurance premiums under Section
19  203(a)(2)(D-19), such taxpayer may elect to subtract
20  that part of a reimbursement received from the
21  insurance company equal to the amount of the expense
22  or loss (including expenses incurred by the insurance
23  company) that would have been taken into account as a
24  deduction for federal income tax purposes if the
25  expense or loss had been uninsured. If a taxpayer
26  makes the election provided for by this subparagraph

 

 

  SB0174 - 29 - LRB104 03806 HLH 13830 b


SB0174- 30 -LRB104 03806 HLH 13830 b   SB0174 - 30 - LRB104 03806 HLH 13830 b
  SB0174 - 30 - LRB104 03806 HLH 13830 b
1  (GG), the insurer to which the premiums were paid must
2  add back to income the amount subtracted by the
3  taxpayer pursuant to this subparagraph (GG). This
4  subparagraph (GG) is exempt from the provisions of
5  Section 250;
6  (HH) For taxable years beginning on or after
7  January 1, 2018 and prior to January 1, 2028, a maximum
8  of $10,000 contributed in the taxable year to a
9  qualified ABLE account under Section 16.6 of the State
10  Treasurer Act, except that amounts excluded from gross
11  income under Section 529(c)(3)(C)(i) or Section
12  529A(c)(1)(C) of the Internal Revenue Code shall not
13  be considered moneys contributed under this
14  subparagraph (HH). For purposes of this subparagraph
15  (HH), contributions made by an employer on behalf of
16  an employee, or matching contributions made by an
17  employee, shall be treated as made by the employee;
18  (II) For taxable years that begin on or after
19  January 1, 2021 and begin before January 1, 2026, the
20  amount that is included in the taxpayer's federal
21  adjusted gross income pursuant to Section 61 of the
22  Internal Revenue Code as discharge of indebtedness
23  attributable to student loan forgiveness and that is
24  not excluded from the taxpayer's federal adjusted
25  gross income pursuant to paragraph (5) of subsection
26  (f) of Section 108 of the Internal Revenue Code;

 

 

  SB0174 - 30 - LRB104 03806 HLH 13830 b


SB0174- 31 -LRB104 03806 HLH 13830 b   SB0174 - 31 - LRB104 03806 HLH 13830 b
  SB0174 - 31 - LRB104 03806 HLH 13830 b
1  (JJ) For taxable years beginning on or after
2  January 1, 2023, for any cannabis establishment
3  operating in this State and licensed under the
4  Cannabis Regulation and Tax Act or any cannabis
5  cultivation center or medical cannabis dispensing
6  organization operating in this State and licensed
7  under the Compassionate Use of Medical Cannabis
8  Program Act, an amount equal to the deductions that
9  were disallowed under Section 280E of the Internal
10  Revenue Code for the taxable year and that would not be
11  added back under this subsection. The provisions of
12  this subparagraph (JJ) are exempt from the provisions
13  of Section 250; and
14  (KK) To the extent includible in gross income for
15  federal income tax purposes, any amount awarded or
16  paid to the taxpayer as a result of a judgment or
17  settlement for fertility fraud as provided in Section
18  15 of the Illinois Fertility Fraud Act, donor
19  fertility fraud as provided in Section 20 of the
20  Illinois Fertility Fraud Act, or similar action in
21  another state; and
22  (LL) For taxable years beginning on or after
23  January 1, 2026, if the taxpayer is a qualified
24  worker, as defined in the Workforce Development
25  through Charitable Loan Repayment Act, an amount equal
26  to the amount included in the taxpayer's federal

 

 

  SB0174 - 31 - LRB104 03806 HLH 13830 b


SB0174- 32 -LRB104 03806 HLH 13830 b   SB0174 - 32 - LRB104 03806 HLH 13830 b
  SB0174 - 32 - LRB104 03806 HLH 13830 b
1  adjusted gross income that is attributable to student
2  loan repayment assistance received by the taxpayer
3  during the taxable year from a qualified community
4  foundation under the provisions of the Workforce
5  Development through Through Charitable Loan Repayment
6  Act.
7  This subparagraph (LL) is exempt from the
8  provisions of Section 250; .
9  (MM) (LL) For taxable years beginning on or after
10  January 1, 2025, if the taxpayer is an eligible
11  resident as defined in the Medical Debt Relief Act, an
12  amount equal to the amount included in the taxpayer's
13  federal adjusted gross income that is attributable to
14  medical debt relief received by the taxpayer during
15  the taxable year from a nonprofit medical debt relief
16  coordinator under the provisions of the Medical Debt
17  Relief Act. This subparagraph (MM) (LL) is exempt from
18  the provisions of Section 250; and .
19  (NN) For taxable years beginning on or after
20  January 1, 2026, an amount equal to any overtime wages
21  paid to the taxpayer during the taxable year, at
22  regular or overtime rates, in excess of the taxpayer's
23  regular and normal monthly or weekly salary. This
24  subparagraph (NN) is exempt from the provisions of
25  Section 250.

 

 

  SB0174 - 32 - LRB104 03806 HLH 13830 b


SB0174- 33 -LRB104 03806 HLH 13830 b   SB0174 - 33 - LRB104 03806 HLH 13830 b
  SB0174 - 33 - LRB104 03806 HLH 13830 b
1  (b) Corporations.
2  (1) In general. In the case of a corporation, base
3  income means an amount equal to the taxpayer's taxable
4  income for the taxable year as modified by paragraph (2).
5  (2) Modifications. The taxable income referred to in
6  paragraph (1) shall be modified by adding thereto the sum
7  of the following amounts:
8  (A) An amount equal to all amounts paid or accrued
9  to the taxpayer as interest and all distributions
10  received from regulated investment companies during
11  the taxable year to the extent excluded from gross
12  income in the computation of taxable income;
13  (B) An amount equal to the amount of tax imposed by
14  this Act to the extent deducted from gross income in
15  the computation of taxable income for the taxable
16  year;
17  (C) In the case of a regulated investment company,
18  an amount equal to the excess of (i) the net long-term
19  capital gain for the taxable year, over (ii) the
20  amount of the capital gain dividends designated as
21  such in accordance with Section 852(b)(3)(C) of the
22  Internal Revenue Code and any amount designated under
23  Section 852(b)(3)(D) of the Internal Revenue Code,
24  attributable to the taxable year (this amendatory Act
25  of 1995 (Public Act 89-89) is declarative of existing
26  law and is not a new enactment);

 

 

  SB0174 - 33 - LRB104 03806 HLH 13830 b


SB0174- 34 -LRB104 03806 HLH 13830 b   SB0174 - 34 - LRB104 03806 HLH 13830 b
  SB0174 - 34 - LRB104 03806 HLH 13830 b
1  (D) The amount of any net operating loss deduction
2  taken in arriving at taxable income, other than a net
3  operating loss carried forward from a taxable year
4  ending prior to December 31, 1986;
5  (E) For taxable years in which a net operating
6  loss carryback or carryforward from a taxable year
7  ending prior to December 31, 1986 is an element of
8  taxable income under paragraph (1) of subsection (e)
9  or subparagraph (E) of paragraph (2) of subsection
10  (e), the amount by which addition modifications other
11  than those provided by this subparagraph (E) exceeded
12  subtraction modifications in such earlier taxable
13  year, with the following limitations applied in the
14  order that they are listed:
15  (i) the addition modification relating to the
16  net operating loss carried back or forward to the
17  taxable year from any taxable year ending prior to
18  December 31, 1986 shall be reduced by the amount
19  of addition modification under this subparagraph
20  (E) which related to that net operating loss and
21  which was taken into account in calculating the
22  base income of an earlier taxable year, and
23  (ii) the addition modification relating to the
24  net operating loss carried back or forward to the
25  taxable year from any taxable year ending prior to
26  December 31, 1986 shall not exceed the amount of

 

 

  SB0174 - 34 - LRB104 03806 HLH 13830 b


SB0174- 35 -LRB104 03806 HLH 13830 b   SB0174 - 35 - LRB104 03806 HLH 13830 b
  SB0174 - 35 - LRB104 03806 HLH 13830 b
1  such carryback or carryforward;
2  For taxable years in which there is a net
3  operating loss carryback or carryforward from more
4  than one other taxable year ending prior to December
5  31, 1986, the addition modification provided in this
6  subparagraph (E) shall be the sum of the amounts
7  computed independently under the preceding provisions
8  of this subparagraph (E) for each such taxable year;
9  (E-5) For taxable years ending after December 31,
10  1997, an amount equal to any eligible remediation
11  costs that the corporation deducted in computing
12  adjusted gross income and for which the corporation
13  claims a credit under subsection (l) of Section 201;
14  (E-10) For taxable years 2001 and thereafter, an
15  amount equal to the bonus depreciation deduction taken
16  on the taxpayer's federal income tax return for the
17  taxable year under subsection (k) of Section 168 of
18  the Internal Revenue Code;
19  (E-11) If the taxpayer sells, transfers, abandons,
20  or otherwise disposes of property for which the
21  taxpayer was required in any taxable year to make an
22  addition modification under subparagraph (E-10), then
23  an amount equal to the aggregate amount of the
24  deductions taken in all taxable years under
25  subparagraph (T) with respect to that property.
26  If the taxpayer continues to own property through

 

 

  SB0174 - 35 - LRB104 03806 HLH 13830 b


SB0174- 36 -LRB104 03806 HLH 13830 b   SB0174 - 36 - LRB104 03806 HLH 13830 b
  SB0174 - 36 - LRB104 03806 HLH 13830 b
1  the last day of the last tax year for which a
2  subtraction is allowed with respect to that property
3  under subparagraph (T) and for which the taxpayer was
4  allowed in any taxable year to make a subtraction
5  modification under subparagraph (T), then an amount
6  equal to that subtraction modification.
7  The taxpayer is required to make the addition
8  modification under this subparagraph only once with
9  respect to any one piece of property;
10  (E-12) An amount equal to the amount otherwise
11  allowed as a deduction in computing base income for
12  interest paid, accrued, or incurred, directly or
13  indirectly, (i) for taxable years ending on or after
14  December 31, 2004, to a foreign person who would be a
15  member of the same unitary business group but for the
16  fact the foreign person's business activity outside
17  the United States is 80% or more of the foreign
18  person's total business activity and (ii) for taxable
19  years ending on or after December 31, 2008, to a person
20  who would be a member of the same unitary business
21  group but for the fact that the person is prohibited
22  under Section 1501(a)(27) from being included in the
23  unitary business group because he or she is ordinarily
24  required to apportion business income under different
25  subsections of Section 304. The addition modification
26  required by this subparagraph shall be reduced to the

 

 

  SB0174 - 36 - LRB104 03806 HLH 13830 b


SB0174- 37 -LRB104 03806 HLH 13830 b   SB0174 - 37 - LRB104 03806 HLH 13830 b
  SB0174 - 37 - LRB104 03806 HLH 13830 b
1  extent that dividends were included in base income of
2  the unitary group for the same taxable year and
3  received by the taxpayer or by a member of the
4  taxpayer's unitary business group (including amounts
5  included in gross income pursuant to Sections 951
6  through 964 of the Internal Revenue Code and amounts
7  included in gross income under Section 78 of the
8  Internal Revenue Code) with respect to the stock of
9  the same person to whom the interest was paid,
10  accrued, or incurred.
11  This paragraph shall not apply to the following:
12  (i) an item of interest paid, accrued, or
13  incurred, directly or indirectly, to a person who
14  is subject in a foreign country or state, other
15  than a state which requires mandatory unitary
16  reporting, to a tax on or measured by net income
17  with respect to such interest; or
18  (ii) an item of interest paid, accrued, or
19  incurred, directly or indirectly, to a person if
20  the taxpayer can establish, based on a
21  preponderance of the evidence, both of the
22  following:
23  (a) the person, during the same taxable
24  year, paid, accrued, or incurred, the interest
25  to a person that is not a related member, and
26  (b) the transaction giving rise to the

 

 

  SB0174 - 37 - LRB104 03806 HLH 13830 b


SB0174- 38 -LRB104 03806 HLH 13830 b   SB0174 - 38 - LRB104 03806 HLH 13830 b
  SB0174 - 38 - LRB104 03806 HLH 13830 b
1  interest expense between the taxpayer and the
2  person did not have as a principal purpose the
3  avoidance of Illinois income tax, and is paid
4  pursuant to a contract or agreement that
5  reflects an arm's-length interest rate and
6  terms; or
7  (iii) the taxpayer can establish, based on
8  clear and convincing evidence, that the interest
9  paid, accrued, or incurred relates to a contract
10  or agreement entered into at arm's-length rates
11  and terms and the principal purpose for the
12  payment is not federal or Illinois tax avoidance;
13  or
14  (iv) an item of interest paid, accrued, or
15  incurred, directly or indirectly, to a person if
16  the taxpayer establishes by clear and convincing
17  evidence that the adjustments are unreasonable; or
18  if the taxpayer and the Director agree in writing
19  to the application or use of an alternative method
20  of apportionment under Section 304(f).
21  Nothing in this subsection shall preclude the
22  Director from making any other adjustment
23  otherwise allowed under Section 404 of this Act
24  for any tax year beginning after the effective
25  date of this amendment provided such adjustment is
26  made pursuant to regulation adopted by the

 

 

  SB0174 - 38 - LRB104 03806 HLH 13830 b


SB0174- 39 -LRB104 03806 HLH 13830 b   SB0174 - 39 - LRB104 03806 HLH 13830 b
  SB0174 - 39 - LRB104 03806 HLH 13830 b
1  Department and such regulations provide methods
2  and standards by which the Department will utilize
3  its authority under Section 404 of this Act;
4  (E-13) An amount equal to the amount of intangible
5  expenses and costs otherwise allowed as a deduction in
6  computing base income, and that were paid, accrued, or
7  incurred, directly or indirectly, (i) for taxable
8  years ending on or after December 31, 2004, to a
9  foreign person who would be a member of the same
10  unitary business group but for the fact that the
11  foreign person's business activity outside the United
12  States is 80% or more of that person's total business
13  activity and (ii) for taxable years ending on or after
14  December 31, 2008, to a person who would be a member of
15  the same unitary business group but for the fact that
16  the person is prohibited under Section 1501(a)(27)
17  from being included in the unitary business group
18  because he or she is ordinarily required to apportion
19  business income under different subsections of Section
20  304. The addition modification required by this
21  subparagraph shall be reduced to the extent that
22  dividends were included in base income of the unitary
23  group for the same taxable year and received by the
24  taxpayer or by a member of the taxpayer's unitary
25  business group (including amounts included in gross
26  income pursuant to Sections 951 through 964 of the

 

 

  SB0174 - 39 - LRB104 03806 HLH 13830 b


SB0174- 40 -LRB104 03806 HLH 13830 b   SB0174 - 40 - LRB104 03806 HLH 13830 b
  SB0174 - 40 - LRB104 03806 HLH 13830 b
1  Internal Revenue Code and amounts included in gross
2  income under Section 78 of the Internal Revenue Code)
3  with respect to the stock of the same person to whom
4  the intangible expenses and costs were directly or
5  indirectly paid, incurred, or accrued. The preceding
6  sentence shall not apply to the extent that the same
7  dividends caused a reduction to the addition
8  modification required under Section 203(b)(2)(E-12) of
9  this Act. As used in this subparagraph, the term
10  "intangible expenses and costs" includes (1) expenses,
11  losses, and costs for, or related to, the direct or
12  indirect acquisition, use, maintenance or management,
13  ownership, sale, exchange, or any other disposition of
14  intangible property; (2) losses incurred, directly or
15  indirectly, from factoring transactions or discounting
16  transactions; (3) royalty, patent, technical, and
17  copyright fees; (4) licensing fees; and (5) other
18  similar expenses and costs. For purposes of this
19  subparagraph, "intangible property" includes patents,
20  patent applications, trade names, trademarks, service
21  marks, copyrights, mask works, trade secrets, and
22  similar types of intangible assets.
23  This paragraph shall not apply to the following:
24  (i) any item of intangible expenses or costs
25  paid, accrued, or incurred, directly or
26  indirectly, from a transaction with a person who

 

 

  SB0174 - 40 - LRB104 03806 HLH 13830 b


SB0174- 41 -LRB104 03806 HLH 13830 b   SB0174 - 41 - LRB104 03806 HLH 13830 b
  SB0174 - 41 - LRB104 03806 HLH 13830 b
1  is subject in a foreign country or state, other
2  than a state which requires mandatory unitary
3  reporting, to a tax on or measured by net income
4  with respect to such item; or
5  (ii) any item of intangible expense or cost
6  paid, accrued, or incurred, directly or
7  indirectly, if the taxpayer can establish, based
8  on a preponderance of the evidence, both of the
9  following:
10  (a) the person during the same taxable
11  year paid, accrued, or incurred, the
12  intangible expense or cost to a person that is
13  not a related member, and
14  (b) the transaction giving rise to the
15  intangible expense or cost between the
16  taxpayer and the person did not have as a
17  principal purpose the avoidance of Illinois
18  income tax, and is paid pursuant to a contract
19  or agreement that reflects arm's-length terms;
20  or
21  (iii) any item of intangible expense or cost
22  paid, accrued, or incurred, directly or
23  indirectly, from a transaction with a person if
24  the taxpayer establishes by clear and convincing
25  evidence, that the adjustments are unreasonable;
26  or if the taxpayer and the Director agree in

 

 

  SB0174 - 41 - LRB104 03806 HLH 13830 b


SB0174- 42 -LRB104 03806 HLH 13830 b   SB0174 - 42 - LRB104 03806 HLH 13830 b
  SB0174 - 42 - LRB104 03806 HLH 13830 b
1  writing to the application or use of an
2  alternative method of apportionment under Section
3  304(f);
4  Nothing in this subsection shall preclude the
5  Director from making any other adjustment
6  otherwise allowed under Section 404 of this Act
7  for any tax year beginning after the effective
8  date of this amendment provided such adjustment is
9  made pursuant to regulation adopted by the
10  Department and such regulations provide methods
11  and standards by which the Department will utilize
12  its authority under Section 404 of this Act;
13  (E-14) For taxable years ending on or after
14  December 31, 2008, an amount equal to the amount of
15  insurance premium expenses and costs otherwise allowed
16  as a deduction in computing base income, and that were
17  paid, accrued, or incurred, directly or indirectly, to
18  a person who would be a member of the same unitary
19  business group but for the fact that the person is
20  prohibited under Section 1501(a)(27) from being
21  included in the unitary business group because he or
22  she is ordinarily required to apportion business
23  income under different subsections of Section 304. The
24  addition modification required by this subparagraph
25  shall be reduced to the extent that dividends were
26  included in base income of the unitary group for the

 

 

  SB0174 - 42 - LRB104 03806 HLH 13830 b


SB0174- 43 -LRB104 03806 HLH 13830 b   SB0174 - 43 - LRB104 03806 HLH 13830 b
  SB0174 - 43 - LRB104 03806 HLH 13830 b
1  same taxable year and received by the taxpayer or by a
2  member of the taxpayer's unitary business group
3  (including amounts included in gross income under
4  Sections 951 through 964 of the Internal Revenue Code
5  and amounts included in gross income under Section 78
6  of the Internal Revenue Code) with respect to the
7  stock of the same person to whom the premiums and costs
8  were directly or indirectly paid, incurred, or
9  accrued. The preceding sentence does not apply to the
10  extent that the same dividends caused a reduction to
11  the addition modification required under Section
12  203(b)(2)(E-12) or Section 203(b)(2)(E-13) of this
13  Act;
14  (E-15) For taxable years beginning after December
15  31, 2008, any deduction for dividends paid by a
16  captive real estate investment trust that is allowed
17  to a real estate investment trust under Section
18  857(b)(2)(B) of the Internal Revenue Code for
19  dividends paid;
20  (E-16) An amount equal to the credit allowable to
21  the taxpayer under Section 218(a) of this Act,
22  determined without regard to Section 218(c) of this
23  Act;
24  (E-17) For taxable years ending on or after
25  December 31, 2017, an amount equal to the deduction
26  allowed under Section 199 of the Internal Revenue Code

 

 

  SB0174 - 43 - LRB104 03806 HLH 13830 b


SB0174- 44 -LRB104 03806 HLH 13830 b   SB0174 - 44 - LRB104 03806 HLH 13830 b
  SB0174 - 44 - LRB104 03806 HLH 13830 b
1  for the taxable year;
2  (E-18) for taxable years beginning after December
3  31, 2018, an amount equal to the deduction allowed
4  under Section 250(a)(1)(A) of the Internal Revenue
5  Code for the taxable year;
6  (E-19) for taxable years ending on or after June
7  30, 2021, an amount equal to the deduction allowed
8  under Section 250(a)(1)(B)(i) of the Internal Revenue
9  Code for the taxable year;
10  (E-20) for taxable years ending on or after June
11  30, 2021, an amount equal to the deduction allowed
12  under Sections 243(e) and 245A(a) of the Internal
13  Revenue Code for the taxable year;
14  (E-21) the amount that is claimed as a federal
15  deduction when computing the taxpayer's federal
16  taxable income for the taxable year and that is
17  attributable to an endowment gift for which the
18  taxpayer receives a credit under the Illinois Gives
19  Tax Credit Act;
20  and by deducting from the total so obtained the sum of the
21  following amounts:
22  (F) An amount equal to the amount of any tax
23  imposed by this Act which was refunded to the taxpayer
24  and included in such total for the taxable year;
25  (G) An amount equal to any amount included in such
26  total under Section 78 of the Internal Revenue Code;

 

 

  SB0174 - 44 - LRB104 03806 HLH 13830 b


SB0174- 45 -LRB104 03806 HLH 13830 b   SB0174 - 45 - LRB104 03806 HLH 13830 b
  SB0174 - 45 - LRB104 03806 HLH 13830 b
1  (H) In the case of a regulated investment company,
2  an amount equal to the amount of exempt interest
3  dividends as defined in subsection (b)(5) of Section
4  852 of the Internal Revenue Code, paid to shareholders
5  for the taxable year;
6  (I) With the exception of any amounts subtracted
7  under subparagraph (J), an amount equal to the sum of
8  all amounts disallowed as deductions by (i) Sections
9  171(a)(2) and 265(a)(2) and amounts disallowed as
10  interest expense by Section 291(a)(3) of the Internal
11  Revenue Code, and all amounts of expenses allocable to
12  interest and disallowed as deductions by Section
13  265(a)(1) of the Internal Revenue Code; and (ii) for
14  taxable years ending on or after August 13, 1999,
15  Sections 171(a)(2), 265, 280C, 291(a)(3), and
16  832(b)(5)(B)(i) of the Internal Revenue Code, plus,
17  for tax years ending on or after December 31, 2011,
18  amounts disallowed as deductions by Section 45G(e)(3)
19  of the Internal Revenue Code and, for taxable years
20  ending on or after December 31, 2008, any amount
21  included in gross income under Section 87 of the
22  Internal Revenue Code and the policyholders' share of
23  tax-exempt interest of a life insurance company under
24  Section 807(a)(2)(B) of the Internal Revenue Code (in
25  the case of a life insurance company with gross income
26  from a decrease in reserves for the tax year) or

 

 

  SB0174 - 45 - LRB104 03806 HLH 13830 b


SB0174- 46 -LRB104 03806 HLH 13830 b   SB0174 - 46 - LRB104 03806 HLH 13830 b
  SB0174 - 46 - LRB104 03806 HLH 13830 b
1  Section 807(b)(1)(B) of the Internal Revenue Code (in
2  the case of a life insurance company allowed a
3  deduction for an increase in reserves for the tax
4  year); the provisions of this subparagraph are exempt
5  from the provisions of Section 250;
6  (J) An amount equal to all amounts included in
7  such total which are exempt from taxation by this
8  State either by reason of its statutes or Constitution
9  or by reason of the Constitution, treaties or statutes
10  of the United States; provided that, in the case of any
11  statute of this State that exempts income derived from
12  bonds or other obligations from the tax imposed under
13  this Act, the amount exempted shall be the interest
14  net of bond premium amortization;
15  (K) An amount equal to those dividends included in
16  such total which were paid by a corporation which
17  conducts business operations in a River Edge
18  Redevelopment Zone or zones created under the River
19  Edge Redevelopment Zone Act and conducts substantially
20  all of its operations in a River Edge Redevelopment
21  Zone or zones. This subparagraph (K) is exempt from
22  the provisions of Section 250;
23  (L) An amount equal to those dividends included in
24  such total that were paid by a corporation that
25  conducts business operations in a federally designated
26  Foreign Trade Zone or Sub-Zone and that is designated

 

 

  SB0174 - 46 - LRB104 03806 HLH 13830 b


SB0174- 47 -LRB104 03806 HLH 13830 b   SB0174 - 47 - LRB104 03806 HLH 13830 b
  SB0174 - 47 - LRB104 03806 HLH 13830 b
1  a High Impact Business located in Illinois; provided
2  that dividends eligible for the deduction provided in
3  subparagraph (K) of paragraph 2 of this subsection
4  shall not be eligible for the deduction provided under
5  this subparagraph (L);
6  (M) For any taxpayer that is a financial
7  organization within the meaning of Section 304(c) of
8  this Act, an amount included in such total as interest
9  income from a loan or loans made by such taxpayer to a
10  borrower, to the extent that such a loan is secured by
11  property which is eligible for the River Edge
12  Redevelopment Zone Investment Credit. To determine the
13  portion of a loan or loans that is secured by property
14  eligible for a Section 201(f) investment credit to the
15  borrower, the entire principal amount of the loan or
16  loans between the taxpayer and the borrower should be
17  divided into the basis of the Section 201(f)
18  investment credit property which secures the loan or
19  loans, using for this purpose the original basis of
20  such property on the date that it was placed in service
21  in the River Edge Redevelopment Zone. The subtraction
22  modification available to the taxpayer in any year
23  under this subsection shall be that portion of the
24  total interest paid by the borrower with respect to
25  such loan attributable to the eligible property as
26  calculated under the previous sentence. This

 

 

  SB0174 - 47 - LRB104 03806 HLH 13830 b


SB0174- 48 -LRB104 03806 HLH 13830 b   SB0174 - 48 - LRB104 03806 HLH 13830 b
  SB0174 - 48 - LRB104 03806 HLH 13830 b
1  subparagraph (M) is exempt from the provisions of
2  Section 250;
3  (M-1) For any taxpayer that is a financial
4  organization within the meaning of Section 304(c) of
5  this Act, an amount included in such total as interest
6  income from a loan or loans made by such taxpayer to a
7  borrower, to the extent that such a loan is secured by
8  property which is eligible for the High Impact
9  Business Investment Credit. To determine the portion
10  of a loan or loans that is secured by property eligible
11  for a Section 201(h) investment credit to the
12  borrower, the entire principal amount of the loan or
13  loans between the taxpayer and the borrower should be
14  divided into the basis of the Section 201(h)
15  investment credit property which secures the loan or
16  loans, using for this purpose the original basis of
17  such property on the date that it was placed in service
18  in a federally designated Foreign Trade Zone or
19  Sub-Zone located in Illinois. No taxpayer that is
20  eligible for the deduction provided in subparagraph
21  (M) of paragraph (2) of this subsection shall be
22  eligible for the deduction provided under this
23  subparagraph (M-1). The subtraction modification
24  available to taxpayers in any year under this
25  subsection shall be that portion of the total interest
26  paid by the borrower with respect to such loan

 

 

  SB0174 - 48 - LRB104 03806 HLH 13830 b


SB0174- 49 -LRB104 03806 HLH 13830 b   SB0174 - 49 - LRB104 03806 HLH 13830 b
  SB0174 - 49 - LRB104 03806 HLH 13830 b
1  attributable to the eligible property as calculated
2  under the previous sentence;
3  (N) Two times any contribution made during the
4  taxable year to a designated zone organization to the
5  extent that the contribution (i) qualifies as a
6  charitable contribution under subsection (c) of
7  Section 170 of the Internal Revenue Code and (ii)
8  must, by its terms, be used for a project approved by
9  the Department of Commerce and Economic Opportunity
10  under Section 11 of the Illinois Enterprise Zone Act
11  or under Section 10-10 of the River Edge Redevelopment
12  Zone Act. This subparagraph (N) is exempt from the
13  provisions of Section 250;
14  (O) An amount equal to: (i) 85% for taxable years
15  ending on or before December 31, 1992, or, a
16  percentage equal to the percentage allowable under
17  Section 243(a)(1) of the Internal Revenue Code of 1986
18  for taxable years ending after December 31, 1992, of
19  the amount by which dividends included in taxable
20  income and received from a corporation that is not
21  created or organized under the laws of the United
22  States or any state or political subdivision thereof,
23  including, for taxable years ending on or after
24  December 31, 1988, dividends received or deemed
25  received or paid or deemed paid under Sections 951
26  through 965 of the Internal Revenue Code, exceed the

 

 

  SB0174 - 49 - LRB104 03806 HLH 13830 b


SB0174- 50 -LRB104 03806 HLH 13830 b   SB0174 - 50 - LRB104 03806 HLH 13830 b
  SB0174 - 50 - LRB104 03806 HLH 13830 b
1  amount of the modification provided under subparagraph
2  (G) of paragraph (2) of this subsection (b) which is
3  related to such dividends, and including, for taxable
4  years ending on or after December 31, 2008, dividends
5  received from a captive real estate investment trust;
6  plus (ii) 100% of the amount by which dividends,
7  included in taxable income and received, including,
8  for taxable years ending on or after December 31,
9  1988, dividends received or deemed received or paid or
10  deemed paid under Sections 951 through 964 of the
11  Internal Revenue Code and including, for taxable years
12  ending on or after December 31, 2008, dividends
13  received from a captive real estate investment trust,
14  from any such corporation specified in clause (i) that
15  would but for the provisions of Section 1504(b)(3) of
16  the Internal Revenue Code be treated as a member of the
17  affiliated group which includes the dividend
18  recipient, exceed the amount of the modification
19  provided under subparagraph (G) of paragraph (2) of
20  this subsection (b) which is related to such
21  dividends. For taxable years ending on or after June
22  30, 2021, (i) for purposes of this subparagraph, the
23  term "dividend" does not include any amount treated as
24  a dividend under Section 1248 of the Internal Revenue
25  Code, and (ii) this subparagraph shall not apply to
26  dividends for which a deduction is allowed under

 

 

  SB0174 - 50 - LRB104 03806 HLH 13830 b


SB0174- 51 -LRB104 03806 HLH 13830 b   SB0174 - 51 - LRB104 03806 HLH 13830 b
  SB0174 - 51 - LRB104 03806 HLH 13830 b
1  Section 245(a) of the Internal Revenue Code. This
2  subparagraph (O) is exempt from the provisions of
3  Section 250 of this Act;
4  (P) An amount equal to any contribution made to a
5  job training project established pursuant to the Tax
6  Increment Allocation Redevelopment Act;
7  (Q) An amount equal to the amount of the deduction
8  used to compute the federal income tax credit for
9  restoration of substantial amounts held under claim of
10  right for the taxable year pursuant to Section 1341 of
11  the Internal Revenue Code;
12  (R) On and after July 20, 1999, in the case of an
13  attorney-in-fact with respect to whom an interinsurer
14  or a reciprocal insurer has made the election under
15  Section 835 of the Internal Revenue Code, 26 U.S.C.
16  835, an amount equal to the excess, if any, of the
17  amounts paid or incurred by that interinsurer or
18  reciprocal insurer in the taxable year to the
19  attorney-in-fact over the deduction allowed to that
20  interinsurer or reciprocal insurer with respect to the
21  attorney-in-fact under Section 835(b) of the Internal
22  Revenue Code for the taxable year; the provisions of
23  this subparagraph are exempt from the provisions of
24  Section 250;
25  (S) For taxable years ending on or after December
26  31, 1997, in the case of a Subchapter S corporation, an

 

 

  SB0174 - 51 - LRB104 03806 HLH 13830 b


SB0174- 52 -LRB104 03806 HLH 13830 b   SB0174 - 52 - LRB104 03806 HLH 13830 b
  SB0174 - 52 - LRB104 03806 HLH 13830 b
1  amount equal to all amounts of income allocable to a
2  shareholder subject to the Personal Property Tax
3  Replacement Income Tax imposed by subsections (c) and
4  (d) of Section 201 of this Act, including amounts
5  allocable to organizations exempt from federal income
6  tax by reason of Section 501(a) of the Internal
7  Revenue Code. This subparagraph (S) is exempt from the
8  provisions of Section 250;
9  (T) For taxable years 2001 and thereafter, for the
10  taxable year in which the bonus depreciation deduction
11  is taken on the taxpayer's federal income tax return
12  under subsection (k) of Section 168 of the Internal
13  Revenue Code and for each applicable taxable year
14  thereafter, an amount equal to "x", where:
15  (1) "y" equals the amount of the depreciation
16  deduction taken for the taxable year on the
17  taxpayer's federal income tax return on property
18  for which the bonus depreciation deduction was
19  taken in any year under subsection (k) of Section
20  168 of the Internal Revenue Code, but not
21  including the bonus depreciation deduction;
22  (2) for taxable years ending on or before
23  December 31, 2005, "x" equals "y" multiplied by 30
24  and then divided by 70 (or "y" multiplied by
25  0.429); and
26  (3) for taxable years ending after December

 

 

  SB0174 - 52 - LRB104 03806 HLH 13830 b


SB0174- 53 -LRB104 03806 HLH 13830 b   SB0174 - 53 - LRB104 03806 HLH 13830 b
  SB0174 - 53 - LRB104 03806 HLH 13830 b
1  31, 2005:
2  (i) for property on which a bonus
3  depreciation deduction of 30% of the adjusted
4  basis was taken, "x" equals "y" multiplied by
5  30 and then divided by 70 (or "y" multiplied
6  by 0.429);
7  (ii) for property on which a bonus
8  depreciation deduction of 50% of the adjusted
9  basis was taken, "x" equals "y" multiplied by
10  1.0;
11  (iii) for property on which a bonus
12  depreciation deduction of 100% of the adjusted
13  basis was taken in a taxable year ending on or
14  after December 31, 2021, "x" equals the
15  depreciation deduction that would be allowed
16  on that property if the taxpayer had made the
17  election under Section 168(k)(7) of the
18  Internal Revenue Code to not claim bonus
19  depreciation on that property; and
20  (iv) for property on which a bonus
21  depreciation deduction of a percentage other
22  than 30%, 50% or 100% of the adjusted basis
23  was taken in a taxable year ending on or after
24  December 31, 2021, "x" equals "y" multiplied
25  by 100 times the percentage bonus depreciation
26  on the property (that is, 100(bonus%)) and

 

 

  SB0174 - 53 - LRB104 03806 HLH 13830 b


SB0174- 54 -LRB104 03806 HLH 13830 b   SB0174 - 54 - LRB104 03806 HLH 13830 b
  SB0174 - 54 - LRB104 03806 HLH 13830 b
1  then divided by 100 times 1 minus the
2  percentage bonus depreciation on the property
3  (that is, 100(1-bonus%)).
4  The aggregate amount deducted under this
5  subparagraph in all taxable years for any one piece of
6  property may not exceed the amount of the bonus
7  depreciation deduction taken on that property on the
8  taxpayer's federal income tax return under subsection
9  (k) of Section 168 of the Internal Revenue Code. This
10  subparagraph (T) is exempt from the provisions of
11  Section 250;
12  (U) If the taxpayer sells, transfers, abandons, or
13  otherwise disposes of property for which the taxpayer
14  was required in any taxable year to make an addition
15  modification under subparagraph (E-10), then an amount
16  equal to that addition modification.
17  If the taxpayer continues to own property through
18  the last day of the last tax year for which a
19  subtraction is allowed with respect to that property
20  under subparagraph (T) and for which the taxpayer was
21  required in any taxable year to make an addition
22  modification under subparagraph (E-10), then an amount
23  equal to that addition modification.
24  The taxpayer is allowed to take the deduction
25  under this subparagraph only once with respect to any
26  one piece of property.

 

 

  SB0174 - 54 - LRB104 03806 HLH 13830 b


SB0174- 55 -LRB104 03806 HLH 13830 b   SB0174 - 55 - LRB104 03806 HLH 13830 b
  SB0174 - 55 - LRB104 03806 HLH 13830 b
1  This subparagraph (U) is exempt from the
2  provisions of Section 250;
3  (V) The amount of: (i) any interest income (net of
4  the deductions allocable thereto) taken into account
5  for the taxable year with respect to a transaction
6  with a taxpayer that is required to make an addition
7  modification with respect to such transaction under
8  Section 203(a)(2)(D-17), 203(b)(2)(E-12),
9  203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
10  the amount of such addition modification, (ii) any
11  income from intangible property (net of the deductions
12  allocable thereto) taken into account for the taxable
13  year with respect to a transaction with a taxpayer
14  that is required to make an addition modification with
15  respect to such transaction under Section
16  203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
17  203(d)(2)(D-8), but not to exceed the amount of such
18  addition modification, and (iii) any insurance premium
19  income (net of deductions allocable thereto) taken
20  into account for the taxable year with respect to a
21  transaction with a taxpayer that is required to make
22  an addition modification with respect to such
23  transaction under Section 203(a)(2)(D-19), Section
24  203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
25  203(d)(2)(D-9), but not to exceed the amount of that
26  addition modification. This subparagraph (V) is exempt

 

 

  SB0174 - 55 - LRB104 03806 HLH 13830 b


SB0174- 56 -LRB104 03806 HLH 13830 b   SB0174 - 56 - LRB104 03806 HLH 13830 b
  SB0174 - 56 - LRB104 03806 HLH 13830 b
1  from the provisions of Section 250;
2  (W) An amount equal to the interest income taken
3  into account for the taxable year (net of the
4  deductions allocable thereto) with respect to
5  transactions with (i) a foreign person who would be a
6  member of the taxpayer's unitary business group but
7  for the fact that the foreign person's business
8  activity outside the United States is 80% or more of
9  that person's total business activity and (ii) for
10  taxable years ending on or after December 31, 2008, to
11  a person who would be a member of the same unitary
12  business group but for the fact that the person is
13  prohibited under Section 1501(a)(27) from being
14  included in the unitary business group because he or
15  she is ordinarily required to apportion business
16  income under different subsections of Section 304, but
17  not to exceed the addition modification required to be
18  made for the same taxable year under Section
19  203(b)(2)(E-12) for interest paid, accrued, or
20  incurred, directly or indirectly, to the same person.
21  This subparagraph (W) is exempt from the provisions of
22  Section 250;
23  (X) An amount equal to the income from intangible
24  property taken into account for the taxable year (net
25  of the deductions allocable thereto) with respect to
26  transactions with (i) a foreign person who would be a

 

 

  SB0174 - 56 - LRB104 03806 HLH 13830 b


SB0174- 57 -LRB104 03806 HLH 13830 b   SB0174 - 57 - LRB104 03806 HLH 13830 b
  SB0174 - 57 - LRB104 03806 HLH 13830 b
1  member of the taxpayer's unitary business group but
2  for the fact that the foreign person's business
3  activity outside the United States is 80% or more of
4  that person's total business activity and (ii) for
5  taxable years ending on or after December 31, 2008, to
6  a person who would be a member of the same unitary
7  business group but for the fact that the person is
8  prohibited under Section 1501(a)(27) from being
9  included in the unitary business group because he or
10  she is ordinarily required to apportion business
11  income under different subsections of Section 304, but
12  not to exceed the addition modification required to be
13  made for the same taxable year under Section
14  203(b)(2)(E-13) for intangible expenses and costs
15  paid, accrued, or incurred, directly or indirectly, to
16  the same foreign person. This subparagraph (X) is
17  exempt from the provisions of Section 250;
18  (Y) For taxable years ending on or after December
19  31, 2011, in the case of a taxpayer who was required to
20  add back any insurance premiums under Section
21  203(b)(2)(E-14), such taxpayer may elect to subtract
22  that part of a reimbursement received from the
23  insurance company equal to the amount of the expense
24  or loss (including expenses incurred by the insurance
25  company) that would have been taken into account as a
26  deduction for federal income tax purposes if the

 

 

  SB0174 - 57 - LRB104 03806 HLH 13830 b


SB0174- 58 -LRB104 03806 HLH 13830 b   SB0174 - 58 - LRB104 03806 HLH 13830 b
  SB0174 - 58 - LRB104 03806 HLH 13830 b
1  expense or loss had been uninsured. If a taxpayer
2  makes the election provided for by this subparagraph
3  (Y), the insurer to which the premiums were paid must
4  add back to income the amount subtracted by the
5  taxpayer pursuant to this subparagraph (Y). This
6  subparagraph (Y) is exempt from the provisions of
7  Section 250;
8  (Z) The difference between the nondeductible
9  controlled foreign corporation dividends under Section
10  965(e)(3) of the Internal Revenue Code over the
11  taxable income of the taxpayer, computed without
12  regard to Section 965(e)(2)(A) of the Internal Revenue
13  Code, and without regard to any net operating loss
14  deduction. This subparagraph (Z) is exempt from the
15  provisions of Section 250; and
16  (AA) For taxable years beginning on or after
17  January 1, 2023, for any cannabis establishment
18  operating in this State and licensed under the
19  Cannabis Regulation and Tax Act or any cannabis
20  cultivation center or medical cannabis dispensing
21  organization operating in this State and licensed
22  under the Compassionate Use of Medical Cannabis
23  Program Act, an amount equal to the deductions that
24  were disallowed under Section 280E of the Internal
25  Revenue Code for the taxable year and that would not be
26  added back under this subsection. The provisions of

 

 

  SB0174 - 58 - LRB104 03806 HLH 13830 b


SB0174- 59 -LRB104 03806 HLH 13830 b   SB0174 - 59 - LRB104 03806 HLH 13830 b
  SB0174 - 59 - LRB104 03806 HLH 13830 b
1  this subparagraph (AA) are exempt from the provisions
2  of Section 250.
3  (3) Special rule. For purposes of paragraph (2)(A),
4  "gross income" in the case of a life insurance company,
5  for tax years ending on and after December 31, 1994, and
6  prior to December 31, 2011, shall mean the gross
7  investment income for the taxable year and, for tax years
8  ending on or after December 31, 2011, shall mean all
9  amounts included in life insurance gross income under
10  Section 803(a)(3) of the Internal Revenue Code.
11  (c) Trusts and estates.
12  (1) In general. In the case of a trust or estate, base
13  income means an amount equal to the taxpayer's taxable
14  income for the taxable year as modified by paragraph (2).
15  (2) Modifications. Subject to the provisions of
16  paragraph (3), the taxable income referred to in paragraph
17  (1) shall be modified by adding thereto the sum of the
18  following amounts:
19  (A) An amount equal to all amounts paid or accrued
20  to the taxpayer as interest or dividends during the
21  taxable year to the extent excluded from gross income
22  in the computation of taxable income;
23  (B) In the case of (i) an estate, $600; (ii) a
24  trust which, under its governing instrument, is
25  required to distribute all of its income currently,

 

 

  SB0174 - 59 - LRB104 03806 HLH 13830 b


SB0174- 60 -LRB104 03806 HLH 13830 b   SB0174 - 60 - LRB104 03806 HLH 13830 b
  SB0174 - 60 - LRB104 03806 HLH 13830 b
1  $300; and (iii) any other trust, $100, but in each such
2  case, only to the extent such amount was deducted in
3  the computation of taxable income;
4  (C) An amount equal to the amount of tax imposed by
5  this Act to the extent deducted from gross income in
6  the computation of taxable income for the taxable
7  year;
8  (D) The amount of any net operating loss deduction
9  taken in arriving at taxable income, other than a net
10  operating loss carried forward from a taxable year
11  ending prior to December 31, 1986;
12  (E) For taxable years in which a net operating
13  loss carryback or carryforward from a taxable year
14  ending prior to December 31, 1986 is an element of
15  taxable income under paragraph (1) of subsection (e)
16  or subparagraph (E) of paragraph (2) of subsection
17  (e), the amount by which addition modifications other
18  than those provided by this subparagraph (E) exceeded
19  subtraction modifications in such taxable year, with
20  the following limitations applied in the order that
21  they are listed:
22  (i) the addition modification relating to the
23  net operating loss carried back or forward to the
24  taxable year from any taxable year ending prior to
25  December 31, 1986 shall be reduced by the amount
26  of addition modification under this subparagraph

 

 

  SB0174 - 60 - LRB104 03806 HLH 13830 b


SB0174- 61 -LRB104 03806 HLH 13830 b   SB0174 - 61 - LRB104 03806 HLH 13830 b
  SB0174 - 61 - LRB104 03806 HLH 13830 b
1  (E) which related to that net operating loss and
2  which was taken into account in calculating the
3  base income of an earlier taxable year, and
4  (ii) the addition modification relating to the
5  net operating loss carried back or forward to the
6  taxable year from any taxable year ending prior to
7  December 31, 1986 shall not exceed the amount of
8  such carryback or carryforward;
9  For taxable years in which there is a net
10  operating loss carryback or carryforward from more
11  than one other taxable year ending prior to December
12  31, 1986, the addition modification provided in this
13  subparagraph (E) shall be the sum of the amounts
14  computed independently under the preceding provisions
15  of this subparagraph (E) for each such taxable year;
16  (F) For taxable years ending on or after January
17  1, 1989, an amount equal to the tax deducted pursuant
18  to Section 164 of the Internal Revenue Code if the
19  trust or estate is claiming the same tax for purposes
20  of the Illinois foreign tax credit under Section 601
21  of this Act;
22  (G) An amount equal to the amount of the capital
23  gain deduction allowable under the Internal Revenue
24  Code, to the extent deducted from gross income in the
25  computation of taxable income;
26  (G-5) For taxable years ending after December 31,

 

 

  SB0174 - 61 - LRB104 03806 HLH 13830 b


SB0174- 62 -LRB104 03806 HLH 13830 b   SB0174 - 62 - LRB104 03806 HLH 13830 b
  SB0174 - 62 - LRB104 03806 HLH 13830 b
1  1997, an amount equal to any eligible remediation
2  costs that the trust or estate deducted in computing
3  adjusted gross income and for which the trust or
4  estate claims a credit under subsection (l) of Section
5  201;
6  (G-10) For taxable years 2001 and thereafter, an
7  amount equal to the bonus depreciation deduction taken
8  on the taxpayer's federal income tax return for the
9  taxable year under subsection (k) of Section 168 of
10  the Internal Revenue Code; and
11  (G-11) If the taxpayer sells, transfers, abandons,
12  or otherwise disposes of property for which the
13  taxpayer was required in any taxable year to make an
14  addition modification under subparagraph (G-10), then
15  an amount equal to the aggregate amount of the
16  deductions taken in all taxable years under
17  subparagraph (R) with respect to that property.
18  If the taxpayer continues to own property through
19  the last day of the last tax year for which a
20  subtraction is allowed with respect to that property
21  under subparagraph (R) and for which the taxpayer was
22  allowed in any taxable year to make a subtraction
23  modification under subparagraph (R), then an amount
24  equal to that subtraction modification.
25  The taxpayer is required to make the addition
26  modification under this subparagraph only once with

 

 

  SB0174 - 62 - LRB104 03806 HLH 13830 b


SB0174- 63 -LRB104 03806 HLH 13830 b   SB0174 - 63 - LRB104 03806 HLH 13830 b
  SB0174 - 63 - LRB104 03806 HLH 13830 b
1  respect to any one piece of property;
2  (G-12) An amount equal to the amount otherwise
3  allowed as a deduction in computing base income for
4  interest paid, accrued, or incurred, directly or
5  indirectly, (i) for taxable years ending on or after
6  December 31, 2004, to a foreign person who would be a
7  member of the same unitary business group but for the
8  fact that the foreign person's business activity
9  outside the United States is 80% or more of the foreign
10  person's total business activity and (ii) for taxable
11  years ending on or after December 31, 2008, to a person
12  who would be a member of the same unitary business
13  group but for the fact that the person is prohibited
14  under Section 1501(a)(27) from being included in the
15  unitary business group because he or she is ordinarily
16  required to apportion business income under different
17  subsections of Section 304. The addition modification
18  required by this subparagraph shall be reduced to the
19  extent that dividends were included in base income of
20  the unitary group for the same taxable year and
21  received by the taxpayer or by a member of the
22  taxpayer's unitary business group (including amounts
23  included in gross income pursuant to Sections 951
24  through 964 of the Internal Revenue Code and amounts
25  included in gross income under Section 78 of the
26  Internal Revenue Code) with respect to the stock of

 

 

  SB0174 - 63 - LRB104 03806 HLH 13830 b


SB0174- 64 -LRB104 03806 HLH 13830 b   SB0174 - 64 - LRB104 03806 HLH 13830 b
  SB0174 - 64 - LRB104 03806 HLH 13830 b
1  the same person to whom the interest was paid,
2  accrued, or incurred.
3  This paragraph shall not apply to the following:
4  (i) an item of interest paid, accrued, or
5  incurred, directly or indirectly, to a person who
6  is subject in a foreign country or state, other
7  than a state which requires mandatory unitary
8  reporting, to a tax on or measured by net income
9  with respect to such interest; or
10  (ii) an item of interest paid, accrued, or
11  incurred, directly or indirectly, to a person if
12  the taxpayer can establish, based on a
13  preponderance of the evidence, both of the
14  following:
15  (a) the person, during the same taxable
16  year, paid, accrued, or incurred, the interest
17  to a person that is not a related member, and
18  (b) the transaction giving rise to the
19  interest expense between the taxpayer and the
20  person did not have as a principal purpose the
21  avoidance of Illinois income tax, and is paid
22  pursuant to a contract or agreement that
23  reflects an arm's-length interest rate and
24  terms; or
25  (iii) the taxpayer can establish, based on
26  clear and convincing evidence, that the interest

 

 

  SB0174 - 64 - LRB104 03806 HLH 13830 b


SB0174- 65 -LRB104 03806 HLH 13830 b   SB0174 - 65 - LRB104 03806 HLH 13830 b
  SB0174 - 65 - LRB104 03806 HLH 13830 b
1  paid, accrued, or incurred relates to a contract
2  or agreement entered into at arm's-length rates
3  and terms and the principal purpose for the
4  payment is not federal or Illinois tax avoidance;
5  or
6  (iv) an item of interest paid, accrued, or
7  incurred, directly or indirectly, to a person if
8  the taxpayer establishes by clear and convincing
9  evidence that the adjustments are unreasonable; or
10  if the taxpayer and the Director agree in writing
11  to the application or use of an alternative method
12  of apportionment under Section 304(f).
13  Nothing in this subsection shall preclude the
14  Director from making any other adjustment
15  otherwise allowed under Section 404 of this Act
16  for any tax year beginning after the effective
17  date of this amendment provided such adjustment is
18  made pursuant to regulation adopted by the
19  Department and such regulations provide methods
20  and standards by which the Department will utilize
21  its authority under Section 404 of this Act;
22  (G-13) An amount equal to the amount of intangible
23  expenses and costs otherwise allowed as a deduction in
24  computing base income, and that were paid, accrued, or
25  incurred, directly or indirectly, (i) for taxable
26  years ending on or after December 31, 2004, to a

 

 

  SB0174 - 65 - LRB104 03806 HLH 13830 b


SB0174- 66 -LRB104 03806 HLH 13830 b   SB0174 - 66 - LRB104 03806 HLH 13830 b
  SB0174 - 66 - LRB104 03806 HLH 13830 b
1  foreign person who would be a member of the same
2  unitary business group but for the fact that the
3  foreign person's business activity outside the United
4  States is 80% or more of that person's total business
5  activity and (ii) for taxable years ending on or after
6  December 31, 2008, to a person who would be a member of
7  the same unitary business group but for the fact that
8  the person is prohibited under Section 1501(a)(27)
9  from being included in the unitary business group
10  because he or she is ordinarily required to apportion
11  business income under different subsections of Section
12  304. The addition modification required by this
13  subparagraph shall be reduced to the extent that
14  dividends were included in base income of the unitary
15  group for the same taxable year and received by the
16  taxpayer or by a member of the taxpayer's unitary
17  business group (including amounts included in gross
18  income pursuant to Sections 951 through 964 of the
19  Internal Revenue Code and amounts included in gross
20  income under Section 78 of the Internal Revenue Code)
21  with respect to the stock of the same person to whom
22  the intangible expenses and costs were directly or
23  indirectly paid, incurred, or accrued. The preceding
24  sentence shall not apply to the extent that the same
25  dividends caused a reduction to the addition
26  modification required under Section 203(c)(2)(G-12) of

 

 

  SB0174 - 66 - LRB104 03806 HLH 13830 b


SB0174- 67 -LRB104 03806 HLH 13830 b   SB0174 - 67 - LRB104 03806 HLH 13830 b
  SB0174 - 67 - LRB104 03806 HLH 13830 b
1  this Act. As used in this subparagraph, the term
2  "intangible expenses and costs" includes: (1)
3  expenses, losses, and costs for or related to the
4  direct or indirect acquisition, use, maintenance or
5  management, ownership, sale, exchange, or any other
6  disposition of intangible property; (2) losses
7  incurred, directly or indirectly, from factoring
8  transactions or discounting transactions; (3) royalty,
9  patent, technical, and copyright fees; (4) licensing
10  fees; and (5) other similar expenses and costs. For
11  purposes of this subparagraph, "intangible property"
12  includes patents, patent applications, trade names,
13  trademarks, service marks, copyrights, mask works,
14  trade secrets, and similar types of intangible assets.
15  This paragraph shall not apply to the following:
16  (i) any item of intangible expenses or costs
17  paid, accrued, or incurred, directly or
18  indirectly, from a transaction with a person who
19  is subject in a foreign country or state, other
20  than a state which requires mandatory unitary
21  reporting, to a tax on or measured by net income
22  with respect to such item; or
23  (ii) any item of intangible expense or cost
24  paid, accrued, or incurred, directly or
25  indirectly, if the taxpayer can establish, based
26  on a preponderance of the evidence, both of the

 

 

  SB0174 - 67 - LRB104 03806 HLH 13830 b


SB0174- 68 -LRB104 03806 HLH 13830 b   SB0174 - 68 - LRB104 03806 HLH 13830 b
  SB0174 - 68 - LRB104 03806 HLH 13830 b
1  following:
2  (a) the person during the same taxable
3  year paid, accrued, or incurred, the
4  intangible expense or cost to a person that is
5  not a related member, and
6  (b) the transaction giving rise to the
7  intangible expense or cost between the
8  taxpayer and the person did not have as a
9  principal purpose the avoidance of Illinois
10  income tax, and is paid pursuant to a contract
11  or agreement that reflects arm's-length terms;
12  or
13  (iii) any item of intangible expense or cost
14  paid, accrued, or incurred, directly or
15  indirectly, from a transaction with a person if
16  the taxpayer establishes by clear and convincing
17  evidence, that the adjustments are unreasonable;
18  or if the taxpayer and the Director agree in
19  writing to the application or use of an
20  alternative method of apportionment under Section
21  304(f);
22  Nothing in this subsection shall preclude the
23  Director from making any other adjustment
24  otherwise allowed under Section 404 of this Act
25  for any tax year beginning after the effective
26  date of this amendment provided such adjustment is

 

 

  SB0174 - 68 - LRB104 03806 HLH 13830 b


SB0174- 69 -LRB104 03806 HLH 13830 b   SB0174 - 69 - LRB104 03806 HLH 13830 b
  SB0174 - 69 - LRB104 03806 HLH 13830 b
1  made pursuant to regulation adopted by the
2  Department and such regulations provide methods
3  and standards by which the Department will utilize
4  its authority under Section 404 of this Act;
5  (G-14) For taxable years ending on or after
6  December 31, 2008, an amount equal to the amount of
7  insurance premium expenses and costs otherwise allowed
8  as a deduction in computing base income, and that were
9  paid, accrued, or incurred, directly or indirectly, to
10  a person who would be a member of the same unitary
11  business group but for the fact that the person is
12  prohibited under Section 1501(a)(27) from being
13  included in the unitary business group because he or
14  she is ordinarily required to apportion business
15  income under different subsections of Section 304. The
16  addition modification required by this subparagraph
17  shall be reduced to the extent that dividends were
18  included in base income of the unitary group for the
19  same taxable year and received by the taxpayer or by a
20  member of the taxpayer's unitary business group
21  (including amounts included in gross income under
22  Sections 951 through 964 of the Internal Revenue Code
23  and amounts included in gross income under Section 78
24  of the Internal Revenue Code) with respect to the
25  stock of the same person to whom the premiums and costs
26  were directly or indirectly paid, incurred, or

 

 

  SB0174 - 69 - LRB104 03806 HLH 13830 b


SB0174- 70 -LRB104 03806 HLH 13830 b   SB0174 - 70 - LRB104 03806 HLH 13830 b
  SB0174 - 70 - LRB104 03806 HLH 13830 b
1  accrued. The preceding sentence does not apply to the
2  extent that the same dividends caused a reduction to
3  the addition modification required under Section
4  203(c)(2)(G-12) or Section 203(c)(2)(G-13) of this
5  Act;
6  (G-15) An amount equal to the credit allowable to
7  the taxpayer under Section 218(a) of this Act,
8  determined without regard to Section 218(c) of this
9  Act;
10  (G-16) For taxable years ending on or after
11  December 31, 2017, an amount equal to the deduction
12  allowed under Section 199 of the Internal Revenue Code
13  for the taxable year;
14  (G-17) the amount that is claimed as a federal
15  deduction when computing the taxpayer's federal
16  taxable income for the taxable year and that is
17  attributable to an endowment gift for which the
18  taxpayer receives a credit under the Illinois Gives
19  Tax Credit Act;
20  and by deducting from the total so obtained the sum of the
21  following amounts:
22  (H) An amount equal to all amounts included in
23  such total pursuant to the provisions of Sections
24  402(a), 402(c), 403(a), 403(b), 406(a), 407(a) and 408
25  of the Internal Revenue Code or included in such total
26  as distributions under the provisions of any

 

 

  SB0174 - 70 - LRB104 03806 HLH 13830 b


SB0174- 71 -LRB104 03806 HLH 13830 b   SB0174 - 71 - LRB104 03806 HLH 13830 b
  SB0174 - 71 - LRB104 03806 HLH 13830 b
1  retirement or disability plan for employees of any
2  governmental agency or unit, or retirement payments to
3  retired partners, which payments are excluded in
4  computing net earnings from self employment by Section
5  1402 of the Internal Revenue Code and regulations
6  adopted pursuant thereto;
7  (I) The valuation limitation amount;
8  (J) An amount equal to the amount of any tax
9  imposed by this Act which was refunded to the taxpayer
10  and included in such total for the taxable year;
11  (K) An amount equal to all amounts included in
12  taxable income as modified by subparagraphs (A), (B),
13  (C), (D), (E), (F) and (G) which are exempt from
14  taxation by this State either by reason of its
15  statutes or Constitution or by reason of the
16  Constitution, treaties or statutes of the United
17  States; provided that, in the case of any statute of
18  this State that exempts income derived from bonds or
19  other obligations from the tax imposed under this Act,
20  the amount exempted shall be the interest net of bond
21  premium amortization;
22  (L) With the exception of any amounts subtracted
23  under subparagraph (K), an amount equal to the sum of
24  all amounts disallowed as deductions by (i) Sections
25  171(a)(2) and 265(a)(2) of the Internal Revenue Code,
26  and all amounts of expenses allocable to interest and

 

 

  SB0174 - 71 - LRB104 03806 HLH 13830 b


SB0174- 72 -LRB104 03806 HLH 13830 b   SB0174 - 72 - LRB104 03806 HLH 13830 b
  SB0174 - 72 - LRB104 03806 HLH 13830 b
1  disallowed as deductions by Section 265(a)(1) of the
2  Internal Revenue Code; and (ii) for taxable years
3  ending on or after August 13, 1999, Sections
4  171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
5  Internal Revenue Code, plus, (iii) for taxable years
6  ending on or after December 31, 2011, Section
7  45G(e)(3) of the Internal Revenue Code and, for
8  taxable years ending on or after December 31, 2008,
9  any amount included in gross income under Section 87
10  of the Internal Revenue Code; the provisions of this
11  subparagraph are exempt from the provisions of Section
12  250;
13  (M) An amount equal to those dividends included in
14  such total which were paid by a corporation which
15  conducts business operations in a River Edge
16  Redevelopment Zone or zones created under the River
17  Edge Redevelopment Zone Act and conducts substantially
18  all of its operations in a River Edge Redevelopment
19  Zone or zones. This subparagraph (M) is exempt from
20  the provisions of Section 250;
21  (N) An amount equal to any contribution made to a
22  job training project established pursuant to the Tax
23  Increment Allocation Redevelopment Act;
24  (O) An amount equal to those dividends included in
25  such total that were paid by a corporation that
26  conducts business operations in a federally designated

 

 

  SB0174 - 72 - LRB104 03806 HLH 13830 b


SB0174- 73 -LRB104 03806 HLH 13830 b   SB0174 - 73 - LRB104 03806 HLH 13830 b
  SB0174 - 73 - LRB104 03806 HLH 13830 b
1  Foreign Trade Zone or Sub-Zone and that is designated
2  a High Impact Business located in Illinois; provided
3  that dividends eligible for the deduction provided in
4  subparagraph (M) of paragraph (2) of this subsection
5  shall not be eligible for the deduction provided under
6  this subparagraph (O);
7  (P) An amount equal to the amount of the deduction
8  used to compute the federal income tax credit for
9  restoration of substantial amounts held under claim of
10  right for the taxable year pursuant to Section 1341 of
11  the Internal Revenue Code;
12  (Q) For taxable year 1999 and thereafter, an
13  amount equal to the amount of any (i) distributions,
14  to the extent includible in gross income for federal
15  income tax purposes, made to the taxpayer because of
16  his or her status as a victim of persecution for racial
17  or religious reasons by Nazi Germany or any other Axis
18  regime or as an heir of the victim and (ii) items of
19  income, to the extent includible in gross income for
20  federal income tax purposes, attributable to, derived
21  from or in any way related to assets stolen from,
22  hidden from, or otherwise lost to a victim of
23  persecution for racial or religious reasons by Nazi
24  Germany or any other Axis regime immediately prior to,
25  during, and immediately after World War II, including,
26  but not limited to, interest on the proceeds

 

 

  SB0174 - 73 - LRB104 03806 HLH 13830 b


SB0174- 74 -LRB104 03806 HLH 13830 b   SB0174 - 74 - LRB104 03806 HLH 13830 b
  SB0174 - 74 - LRB104 03806 HLH 13830 b
1  receivable as insurance under policies issued to a
2  victim of persecution for racial or religious reasons
3  by Nazi Germany or any other Axis regime by European
4  insurance companies immediately prior to and during
5  World War II; provided, however, this subtraction from
6  federal adjusted gross income does not apply to assets
7  acquired with such assets or with the proceeds from
8  the sale of such assets; provided, further, this
9  paragraph shall only apply to a taxpayer who was the
10  first recipient of such assets after their recovery
11  and who is a victim of persecution for racial or
12  religious reasons by Nazi Germany or any other Axis
13  regime or as an heir of the victim. The amount of and
14  the eligibility for any public assistance, benefit, or
15  similar entitlement is not affected by the inclusion
16  of items (i) and (ii) of this paragraph in gross income
17  for federal income tax purposes. This paragraph is
18  exempt from the provisions of Section 250;
19  (R) For taxable years 2001 and thereafter, for the
20  taxable year in which the bonus depreciation deduction
21  is taken on the taxpayer's federal income tax return
22  under subsection (k) of Section 168 of the Internal
23  Revenue Code and for each applicable taxable year
24  thereafter, an amount equal to "x", where:
25  (1) "y" equals the amount of the depreciation
26  deduction taken for the taxable year on the

 

 

  SB0174 - 74 - LRB104 03806 HLH 13830 b


SB0174- 75 -LRB104 03806 HLH 13830 b   SB0174 - 75 - LRB104 03806 HLH 13830 b
  SB0174 - 75 - LRB104 03806 HLH 13830 b
1  taxpayer's federal income tax return on property
2  for which the bonus depreciation deduction was
3  taken in any year under subsection (k) of Section
4  168 of the Internal Revenue Code, but not
5  including the bonus depreciation deduction;
6  (2) for taxable years ending on or before
7  December 31, 2005, "x" equals "y" multiplied by 30
8  and then divided by 70 (or "y" multiplied by
9  0.429); and
10  (3) for taxable years ending after December
11  31, 2005:
12  (i) for property on which a bonus
13  depreciation deduction of 30% of the adjusted
14  basis was taken, "x" equals "y" multiplied by
15  30 and then divided by 70 (or "y" multiplied
16  by 0.429);
17  (ii) for property on which a bonus
18  depreciation deduction of 50% of the adjusted
19  basis was taken, "x" equals "y" multiplied by
20  1.0;
21  (iii) for property on which a bonus
22  depreciation deduction of 100% of the adjusted
23  basis was taken in a taxable year ending on or
24  after December 31, 2021, "x" equals the
25  depreciation deduction that would be allowed
26  on that property if the taxpayer had made the

 

 

  SB0174 - 75 - LRB104 03806 HLH 13830 b


SB0174- 76 -LRB104 03806 HLH 13830 b   SB0174 - 76 - LRB104 03806 HLH 13830 b
  SB0174 - 76 - LRB104 03806 HLH 13830 b
1  election under Section 168(k)(7) of the
2  Internal Revenue Code to not claim bonus
3  depreciation on that property; and
4  (iv) for property on which a bonus
5  depreciation deduction of a percentage other
6  than 30%, 50% or 100% of the adjusted basis
7  was taken in a taxable year ending on or after
8  December 31, 2021, "x" equals "y" multiplied
9  by 100 times the percentage bonus depreciation
10  on the property (that is, 100(bonus%)) and
11  then divided by 100 times 1 minus the
12  percentage bonus depreciation on the property
13  (that is, 100(1-bonus%)).
14  The aggregate amount deducted under this
15  subparagraph in all taxable years for any one piece of
16  property may not exceed the amount of the bonus
17  depreciation deduction taken on that property on the
18  taxpayer's federal income tax return under subsection
19  (k) of Section 168 of the Internal Revenue Code. This
20  subparagraph (R) is exempt from the provisions of
21  Section 250;
22  (S) If the taxpayer sells, transfers, abandons, or
23  otherwise disposes of property for which the taxpayer
24  was required in any taxable year to make an addition
25  modification under subparagraph (G-10), then an amount
26  equal to that addition modification.

 

 

  SB0174 - 76 - LRB104 03806 HLH 13830 b


SB0174- 77 -LRB104 03806 HLH 13830 b   SB0174 - 77 - LRB104 03806 HLH 13830 b
  SB0174 - 77 - LRB104 03806 HLH 13830 b
1  If the taxpayer continues to own property through
2  the last day of the last tax year for which a
3  subtraction is allowed with respect to that property
4  under subparagraph (R) and for which the taxpayer was
5  required in any taxable year to make an addition
6  modification under subparagraph (G-10), then an amount
7  equal to that addition modification.
8  The taxpayer is allowed to take the deduction
9  under this subparagraph only once with respect to any
10  one piece of property.
11  This subparagraph (S) is exempt from the
12  provisions of Section 250;
13  (T) The amount of (i) any interest income (net of
14  the deductions allocable thereto) taken into account
15  for the taxable year with respect to a transaction
16  with a taxpayer that is required to make an addition
17  modification with respect to such transaction under
18  Section 203(a)(2)(D-17), 203(b)(2)(E-12),
19  203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
20  the amount of such addition modification and (ii) any
21  income from intangible property (net of the deductions
22  allocable thereto) taken into account for the taxable
23  year with respect to a transaction with a taxpayer
24  that is required to make an addition modification with
25  respect to such transaction under Section
26  203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or

 

 

  SB0174 - 77 - LRB104 03806 HLH 13830 b


SB0174- 78 -LRB104 03806 HLH 13830 b   SB0174 - 78 - LRB104 03806 HLH 13830 b
  SB0174 - 78 - LRB104 03806 HLH 13830 b
1  203(d)(2)(D-8), but not to exceed the amount of such
2  addition modification. This subparagraph (T) is exempt
3  from the provisions of Section 250;
4  (U) An amount equal to the interest income taken
5  into account for the taxable year (net of the
6  deductions allocable thereto) with respect to
7  transactions with (i) a foreign person who would be a
8  member of the taxpayer's unitary business group but
9  for the fact the foreign person's business activity
10  outside the United States is 80% or more of that
11  person's total business activity and (ii) for taxable
12  years ending on or after December 31, 2008, to a person
13  who would be a member of the same unitary business
14  group but for the fact that the person is prohibited
15  under Section 1501(a)(27) from being included in the
16  unitary business group because he or she is ordinarily
17  required to apportion business income under different
18  subsections of Section 304, but not to exceed the
19  addition modification required to be made for the same
20  taxable year under Section 203(c)(2)(G-12) for
21  interest paid, accrued, or incurred, directly or
22  indirectly, to the same person. This subparagraph (U)
23  is exempt from the provisions of Section 250;
24  (V) An amount equal to the income from intangible
25  property taken into account for the taxable year (net
26  of the deductions allocable thereto) with respect to

 

 

  SB0174 - 78 - LRB104 03806 HLH 13830 b


SB0174- 79 -LRB104 03806 HLH 13830 b   SB0174 - 79 - LRB104 03806 HLH 13830 b
  SB0174 - 79 - LRB104 03806 HLH 13830 b
1  transactions with (i) a foreign person who would be a
2  member of the taxpayer's unitary business group but
3  for the fact that the foreign person's business
4  activity outside the United States is 80% or more of
5  that person's total business activity and (ii) for
6  taxable years ending on or after December 31, 2008, to
7  a person who would be a member of the same unitary
8  business group but for the fact that the person is
9  prohibited under Section 1501(a)(27) from being
10  included in the unitary business group because he or
11  she is ordinarily required to apportion business
12  income under different subsections of Section 304, but
13  not to exceed the addition modification required to be
14  made for the same taxable year under Section
15  203(c)(2)(G-13) for intangible expenses and costs
16  paid, accrued, or incurred, directly or indirectly, to
17  the same foreign person. This subparagraph (V) is
18  exempt from the provisions of Section 250;
19  (W) in the case of an estate, an amount equal to
20  all amounts included in such total pursuant to the
21  provisions of Section 111 of the Internal Revenue Code
22  as a recovery of items previously deducted by the
23  decedent from adjusted gross income in the computation
24  of taxable income. This subparagraph (W) is exempt
25  from Section 250;
26  (X) an amount equal to the refund included in such

 

 

  SB0174 - 79 - LRB104 03806 HLH 13830 b


SB0174- 80 -LRB104 03806 HLH 13830 b   SB0174 - 80 - LRB104 03806 HLH 13830 b
  SB0174 - 80 - LRB104 03806 HLH 13830 b
1  total of any tax deducted for federal income tax
2  purposes, to the extent that deduction was added back
3  under subparagraph (F). This subparagraph (X) is
4  exempt from the provisions of Section 250;
5  (Y) For taxable years ending on or after December
6  31, 2011, in the case of a taxpayer who was required to
7  add back any insurance premiums under Section
8  203(c)(2)(G-14), such taxpayer may elect to subtract
9  that part of a reimbursement received from the
10  insurance company equal to the amount of the expense
11  or loss (including expenses incurred by the insurance
12  company) that would have been taken into account as a
13  deduction for federal income tax purposes if the
14  expense or loss had been uninsured. If a taxpayer
15  makes the election provided for by this subparagraph
16  (Y), the insurer to which the premiums were paid must
17  add back to income the amount subtracted by the
18  taxpayer pursuant to this subparagraph (Y). This
19  subparagraph (Y) is exempt from the provisions of
20  Section 250;
21  (Z) For taxable years beginning after December 31,
22  2018 and before January 1, 2026, the amount of excess
23  business loss of the taxpayer disallowed as a
24  deduction by Section 461(l)(1)(B) of the Internal
25  Revenue Code; and
26  (AA) For taxable years beginning on or after

 

 

  SB0174 - 80 - LRB104 03806 HLH 13830 b


SB0174- 81 -LRB104 03806 HLH 13830 b   SB0174 - 81 - LRB104 03806 HLH 13830 b
  SB0174 - 81 - LRB104 03806 HLH 13830 b
1  January 1, 2023, for any cannabis establishment
2  operating in this State and licensed under the
3  Cannabis Regulation and Tax Act or any cannabis
4  cultivation center or medical cannabis dispensing
5  organization operating in this State and licensed
6  under the Compassionate Use of Medical Cannabis
7  Program Act, an amount equal to the deductions that
8  were disallowed under Section 280E of the Internal
9  Revenue Code for the taxable year and that would not be
10  added back under this subsection. The provisions of
11  this subparagraph (AA) are exempt from the provisions
12  of Section 250.
13  (3) Limitation. The amount of any modification
14  otherwise required under this subsection shall, under
15  regulations prescribed by the Department, be adjusted by
16  any amounts included therein which were properly paid,
17  credited, or required to be distributed, or permanently
18  set aside for charitable purposes pursuant to Internal
19  Revenue Code Section 642(c) during the taxable year.
20  (d) Partnerships.
21  (1) In general. In the case of a partnership, base
22  income means an amount equal to the taxpayer's taxable
23  income for the taxable year as modified by paragraph (2).
24  (2) Modifications. The taxable income referred to in
25  paragraph (1) shall be modified by adding thereto the sum

 

 

  SB0174 - 81 - LRB104 03806 HLH 13830 b


SB0174- 82 -LRB104 03806 HLH 13830 b   SB0174 - 82 - LRB104 03806 HLH 13830 b
  SB0174 - 82 - LRB104 03806 HLH 13830 b
1  of the following amounts:
2  (A) An amount equal to all amounts paid or accrued
3  to the taxpayer as interest or dividends during the
4  taxable year to the extent excluded from gross income
5  in the computation of taxable income;
6  (B) An amount equal to the amount of tax imposed by
7  this Act to the extent deducted from gross income for
8  the taxable year;
9  (C) The amount of deductions allowed to the
10  partnership pursuant to Section 707 (c) of the
11  Internal Revenue Code in calculating its taxable
12  income;
13  (D) An amount equal to the amount of the capital
14  gain deduction allowable under the Internal Revenue
15  Code, to the extent deducted from gross income in the
16  computation of taxable income;
17  (D-5) For taxable years 2001 and thereafter, an
18  amount equal to the bonus depreciation deduction taken
19  on the taxpayer's federal income tax return for the
20  taxable year under subsection (k) of Section 168 of
21  the Internal Revenue Code;
22  (D-6) If the taxpayer sells, transfers, abandons,
23  or otherwise disposes of property for which the
24  taxpayer was required in any taxable year to make an
25  addition modification under subparagraph (D-5), then
26  an amount equal to the aggregate amount of the

 

 

  SB0174 - 82 - LRB104 03806 HLH 13830 b


SB0174- 83 -LRB104 03806 HLH 13830 b   SB0174 - 83 - LRB104 03806 HLH 13830 b
  SB0174 - 83 - LRB104 03806 HLH 13830 b
1  deductions taken in all taxable years under
2  subparagraph (O) with respect to that property.
3  If the taxpayer continues to own property through
4  the last day of the last tax year for which a
5  subtraction is allowed with respect to that property
6  under subparagraph (O) and for which the taxpayer was
7  allowed in any taxable year to make a subtraction
8  modification under subparagraph (O), then an amount
9  equal to that subtraction modification.
10  The taxpayer is required to make the addition
11  modification under this subparagraph only once with
12  respect to any one piece of property;
13  (D-7) An amount equal to the amount otherwise
14  allowed as a deduction in computing base income for
15  interest paid, accrued, or incurred, directly or
16  indirectly, (i) for taxable years ending on or after
17  December 31, 2004, to a foreign person who would be a
18  member of the same unitary business group but for the
19  fact the foreign person's business activity outside
20  the United States is 80% or more of the foreign
21  person's total business activity and (ii) for taxable
22  years ending on or after December 31, 2008, to a person
23  who would be a member of the same unitary business
24  group but for the fact that the person is prohibited
25  under Section 1501(a)(27) from being included in the
26  unitary business group because he or she is ordinarily

 

 

  SB0174 - 83 - LRB104 03806 HLH 13830 b


SB0174- 84 -LRB104 03806 HLH 13830 b   SB0174 - 84 - LRB104 03806 HLH 13830 b
  SB0174 - 84 - LRB104 03806 HLH 13830 b
1  required to apportion business income under different
2  subsections of Section 304. The addition modification
3  required by this subparagraph shall be reduced to the
4  extent that dividends were included in base income of
5  the unitary group for the same taxable year and
6  received by the taxpayer or by a member of the
7  taxpayer's unitary business group (including amounts
8  included in gross income pursuant to Sections 951
9  through 964 of the Internal Revenue Code and amounts
10  included in gross income under Section 78 of the
11  Internal Revenue Code) with respect to the stock of
12  the same person to whom the interest was paid,
13  accrued, or incurred.
14  This paragraph shall not apply to the following:
15  (i) an item of interest paid, accrued, or
16  incurred, directly or indirectly, to a person who
17  is subject in a foreign country or state, other
18  than a state which requires mandatory unitary
19  reporting, to a tax on or measured by net income
20  with respect to such interest; or
21  (ii) an item of interest paid, accrued, or
22  incurred, directly or indirectly, to a person if
23  the taxpayer can establish, based on a
24  preponderance of the evidence, both of the
25  following:
26  (a) the person, during the same taxable

 

 

  SB0174 - 84 - LRB104 03806 HLH 13830 b


SB0174- 85 -LRB104 03806 HLH 13830 b   SB0174 - 85 - LRB104 03806 HLH 13830 b
  SB0174 - 85 - LRB104 03806 HLH 13830 b
1  year, paid, accrued, or incurred, the interest
2  to a person that is not a related member, and
3  (b) the transaction giving rise to the
4  interest expense between the taxpayer and the
5  person did not have as a principal purpose the
6  avoidance of Illinois income tax, and is paid
7  pursuant to a contract or agreement that
8  reflects an arm's-length interest rate and
9  terms; or
10  (iii) the taxpayer can establish, based on
11  clear and convincing evidence, that the interest
12  paid, accrued, or incurred relates to a contract
13  or agreement entered into at arm's-length rates
14  and terms and the principal purpose for the
15  payment is not federal or Illinois tax avoidance;
16  or
17  (iv) an item of interest paid, accrued, or
18  incurred, directly or indirectly, to a person if
19  the taxpayer establishes by clear and convincing
20  evidence that the adjustments are unreasonable; or
21  if the taxpayer and the Director agree in writing
22  to the application or use of an alternative method
23  of apportionment under Section 304(f).
24  Nothing in this subsection shall preclude the
25  Director from making any other adjustment
26  otherwise allowed under Section 404 of this Act

 

 

  SB0174 - 85 - LRB104 03806 HLH 13830 b


SB0174- 86 -LRB104 03806 HLH 13830 b   SB0174 - 86 - LRB104 03806 HLH 13830 b
  SB0174 - 86 - LRB104 03806 HLH 13830 b
1  for any tax year beginning after the effective
2  date of this amendment provided such adjustment is
3  made pursuant to regulation adopted by the
4  Department and such regulations provide methods
5  and standards by which the Department will utilize
6  its authority under Section 404 of this Act; and
7  (D-8) An amount equal to the amount of intangible
8  expenses and costs otherwise allowed as a deduction in
9  computing base income, and that were paid, accrued, or
10  incurred, directly or indirectly, (i) for taxable
11  years ending on or after December 31, 2004, to a
12  foreign person who would be a member of the same
13  unitary business group but for the fact that the
14  foreign person's business activity outside the United
15  States is 80% or more of that person's total business
16  activity and (ii) for taxable years ending on or after
17  December 31, 2008, to a person who would be a member of
18  the same unitary business group but for the fact that
19  the person is prohibited under Section 1501(a)(27)
20  from being included in the unitary business group
21  because he or she is ordinarily required to apportion
22  business income under different subsections of Section
23  304. The addition modification required by this
24  subparagraph shall be reduced to the extent that
25  dividends were included in base income of the unitary
26  group for the same taxable year and received by the

 

 

  SB0174 - 86 - LRB104 03806 HLH 13830 b


SB0174- 87 -LRB104 03806 HLH 13830 b   SB0174 - 87 - LRB104 03806 HLH 13830 b
  SB0174 - 87 - LRB104 03806 HLH 13830 b
1  taxpayer or by a member of the taxpayer's unitary
2  business group (including amounts included in gross
3  income pursuant to Sections 951 through 964 of the
4  Internal Revenue Code and amounts included in gross
5  income under Section 78 of the Internal Revenue Code)
6  with respect to the stock of the same person to whom
7  the intangible expenses and costs were directly or
8  indirectly paid, incurred or accrued. The preceding
9  sentence shall not apply to the extent that the same
10  dividends caused a reduction to the addition
11  modification required under Section 203(d)(2)(D-7) of
12  this Act. As used in this subparagraph, the term
13  "intangible expenses and costs" includes (1) expenses,
14  losses, and costs for, or related to, the direct or
15  indirect acquisition, use, maintenance or management,
16  ownership, sale, exchange, or any other disposition of
17  intangible property; (2) losses incurred, directly or
18  indirectly, from factoring transactions or discounting
19  transactions; (3) royalty, patent, technical, and
20  copyright fees; (4) licensing fees; and (5) other
21  similar expenses and costs. For purposes of this
22  subparagraph, "intangible property" includes patents,
23  patent applications, trade names, trademarks, service
24  marks, copyrights, mask works, trade secrets, and
25  similar types of intangible assets;
26  This paragraph shall not apply to the following:

 

 

  SB0174 - 87 - LRB104 03806 HLH 13830 b


SB0174- 88 -LRB104 03806 HLH 13830 b   SB0174 - 88 - LRB104 03806 HLH 13830 b
  SB0174 - 88 - LRB104 03806 HLH 13830 b
1  (i) any item of intangible expenses or costs
2  paid, accrued, or incurred, directly or
3  indirectly, from a transaction with a person who
4  is subject in a foreign country or state, other
5  than a state which requires mandatory unitary
6  reporting, to a tax on or measured by net income
7  with respect to such item; or
8  (ii) any item of intangible expense or cost
9  paid, accrued, or incurred, directly or
10  indirectly, if the taxpayer can establish, based
11  on a preponderance of the evidence, both of the
12  following:
13  (a) the person during the same taxable
14  year paid, accrued, or incurred, the
15  intangible expense or cost to a person that is
16  not a related member, and
17  (b) the transaction giving rise to the
18  intangible expense or cost between the
19  taxpayer and the person did not have as a
20  principal purpose the avoidance of Illinois
21  income tax, and is paid pursuant to a contract
22  or agreement that reflects arm's-length terms;
23  or
24  (iii) any item of intangible expense or cost
25  paid, accrued, or incurred, directly or
26  indirectly, from a transaction with a person if

 

 

  SB0174 - 88 - LRB104 03806 HLH 13830 b


SB0174- 89 -LRB104 03806 HLH 13830 b   SB0174 - 89 - LRB104 03806 HLH 13830 b
  SB0174 - 89 - LRB104 03806 HLH 13830 b
1  the taxpayer establishes by clear and convincing
2  evidence, that the adjustments are unreasonable;
3  or if the taxpayer and the Director agree in
4  writing to the application or use of an
5  alternative method of apportionment under Section
6  304(f);
7  Nothing in this subsection shall preclude the
8  Director from making any other adjustment
9  otherwise allowed under Section 404 of this Act
10  for any tax year beginning after the effective
11  date of this amendment provided such adjustment is
12  made pursuant to regulation adopted by the
13  Department and such regulations provide methods
14  and standards by which the Department will utilize
15  its authority under Section 404 of this Act;
16  (D-9) For taxable years ending on or after
17  December 31, 2008, an amount equal to the amount of
18  insurance premium expenses and costs otherwise allowed
19  as a deduction in computing base income, and that were
20  paid, accrued, or incurred, directly or indirectly, to
21  a person who would be a member of the same unitary
22  business group but for the fact that the person is
23  prohibited under Section 1501(a)(27) from being
24  included in the unitary business group because he or
25  she is ordinarily required to apportion business
26  income under different subsections of Section 304. The

 

 

  SB0174 - 89 - LRB104 03806 HLH 13830 b


SB0174- 90 -LRB104 03806 HLH 13830 b   SB0174 - 90 - LRB104 03806 HLH 13830 b
  SB0174 - 90 - LRB104 03806 HLH 13830 b
1  addition modification required by this subparagraph
2  shall be reduced to the extent that dividends were
3  included in base income of the unitary group for the
4  same taxable year and received by the taxpayer or by a
5  member of the taxpayer's unitary business group
6  (including amounts included in gross income under
7  Sections 951 through 964 of the Internal Revenue Code
8  and amounts included in gross income under Section 78
9  of the Internal Revenue Code) with respect to the
10  stock of the same person to whom the premiums and costs
11  were directly or indirectly paid, incurred, or
12  accrued. The preceding sentence does not apply to the
13  extent that the same dividends caused a reduction to
14  the addition modification required under Section
15  203(d)(2)(D-7) or Section 203(d)(2)(D-8) of this Act;
16  (D-10) An amount equal to the credit allowable to
17  the taxpayer under Section 218(a) of this Act,
18  determined without regard to Section 218(c) of this
19  Act;
20  (D-11) For taxable years ending on or after
21  December 31, 2017, an amount equal to the deduction
22  allowed under Section 199 of the Internal Revenue Code
23  for the taxable year;
24  (D-12) the amount that is claimed as a federal
25  deduction when computing the taxpayer's federal
26  taxable income for the taxable year and that is

 

 

  SB0174 - 90 - LRB104 03806 HLH 13830 b


SB0174- 91 -LRB104 03806 HLH 13830 b   SB0174 - 91 - LRB104 03806 HLH 13830 b
  SB0174 - 91 - LRB104 03806 HLH 13830 b
1  attributable to an endowment gift for which the
2  taxpayer receives a credit under the Illinois Gives
3  Tax Credit Act;
4  and by deducting from the total so obtained the following
5  amounts:
6  (E) The valuation limitation amount;
7  (F) An amount equal to the amount of any tax
8  imposed by this Act which was refunded to the taxpayer
9  and included in such total for the taxable year;
10  (G) An amount equal to all amounts included in
11  taxable income as modified by subparagraphs (A), (B),
12  (C) and (D) which are exempt from taxation by this
13  State either by reason of its statutes or Constitution
14  or by reason of the Constitution, treaties or statutes
15  of the United States; provided that, in the case of any
16  statute of this State that exempts income derived from
17  bonds or other obligations from the tax imposed under
18  this Act, the amount exempted shall be the interest
19  net of bond premium amortization;
20  (H) Any income of the partnership which
21  constitutes personal service income as defined in
22  Section 1348(b)(1) of the Internal Revenue Code (as in
23  effect December 31, 1981) or a reasonable allowance
24  for compensation paid or accrued for services rendered
25  by partners to the partnership, whichever is greater;
26  this subparagraph (H) is exempt from the provisions of

 

 

  SB0174 - 91 - LRB104 03806 HLH 13830 b


SB0174- 92 -LRB104 03806 HLH 13830 b   SB0174 - 92 - LRB104 03806 HLH 13830 b
  SB0174 - 92 - LRB104 03806 HLH 13830 b
1  Section 250;
2  (I) An amount equal to all amounts of income
3  distributable to an entity subject to the Personal
4  Property Tax Replacement Income Tax imposed by
5  subsections (c) and (d) of Section 201 of this Act
6  including amounts distributable to organizations
7  exempt from federal income tax by reason of Section
8  501(a) of the Internal Revenue Code; this subparagraph
9  (I) is exempt from the provisions of Section 250;
10  (J) With the exception of any amounts subtracted
11  under subparagraph (G), an amount equal to the sum of
12  all amounts disallowed as deductions by (i) Sections
13  171(a)(2) and 265(a)(2) of the Internal Revenue Code,
14  and all amounts of expenses allocable to interest and
15  disallowed as deductions by Section 265(a)(1) of the
16  Internal Revenue Code; and (ii) for taxable years
17  ending on or after August 13, 1999, Sections
18  171(a)(2), 265, 280C, and 832(b)(5)(B)(i) of the
19  Internal Revenue Code, plus, (iii) for taxable years
20  ending on or after December 31, 2011, Section
21  45G(e)(3) of the Internal Revenue Code and, for
22  taxable years ending on or after December 31, 2008,
23  any amount included in gross income under Section 87
24  of the Internal Revenue Code; the provisions of this
25  subparagraph are exempt from the provisions of Section
26  250;

 

 

  SB0174 - 92 - LRB104 03806 HLH 13830 b


SB0174- 93 -LRB104 03806 HLH 13830 b   SB0174 - 93 - LRB104 03806 HLH 13830 b
  SB0174 - 93 - LRB104 03806 HLH 13830 b
1  (K) An amount equal to those dividends included in
2  such total which were paid by a corporation which
3  conducts business operations in a River Edge
4  Redevelopment Zone or zones created under the River
5  Edge Redevelopment Zone Act and conducts substantially
6  all of its operations from a River Edge Redevelopment
7  Zone or zones. This subparagraph (K) is exempt from
8  the provisions of Section 250;
9  (L) An amount equal to any contribution made to a
10  job training project established pursuant to the Real
11  Property Tax Increment Allocation Redevelopment Act;
12  (M) An amount equal to those dividends included in
13  such total that were paid by a corporation that
14  conducts business operations in a federally designated
15  Foreign Trade Zone or Sub-Zone and that is designated
16  a High Impact Business located in Illinois; provided
17  that dividends eligible for the deduction provided in
18  subparagraph (K) of paragraph (2) of this subsection
19  shall not be eligible for the deduction provided under
20  this subparagraph (M);
21  (N) An amount equal to the amount of the deduction
22  used to compute the federal income tax credit for
23  restoration of substantial amounts held under claim of
24  right for the taxable year pursuant to Section 1341 of
25  the Internal Revenue Code;
26  (O) For taxable years 2001 and thereafter, for the

 

 

  SB0174 - 93 - LRB104 03806 HLH 13830 b


SB0174- 94 -LRB104 03806 HLH 13830 b   SB0174 - 94 - LRB104 03806 HLH 13830 b
  SB0174 - 94 - LRB104 03806 HLH 13830 b
1  taxable year in which the bonus depreciation deduction
2  is taken on the taxpayer's federal income tax return
3  under subsection (k) of Section 168 of the Internal
4  Revenue Code and for each applicable taxable year
5  thereafter, an amount equal to "x", where:
6  (1) "y" equals the amount of the depreciation
7  deduction taken for the taxable year on the
8  taxpayer's federal income tax return on property
9  for which the bonus depreciation deduction was
10  taken in any year under subsection (k) of Section
11  168 of the Internal Revenue Code, but not
12  including the bonus depreciation deduction;
13  (2) for taxable years ending on or before
14  December 31, 2005, "x" equals "y" multiplied by 30
15  and then divided by 70 (or "y" multiplied by
16  0.429); and
17  (3) for taxable years ending after December
18  31, 2005:
19  (i) for property on which a bonus
20  depreciation deduction of 30% of the adjusted
21  basis was taken, "x" equals "y" multiplied by
22  30 and then divided by 70 (or "y" multiplied
23  by 0.429);
24  (ii) for property on which a bonus
25  depreciation deduction of 50% of the adjusted
26  basis was taken, "x" equals "y" multiplied by

 

 

  SB0174 - 94 - LRB104 03806 HLH 13830 b


SB0174- 95 -LRB104 03806 HLH 13830 b   SB0174 - 95 - LRB104 03806 HLH 13830 b
  SB0174 - 95 - LRB104 03806 HLH 13830 b
1  1.0;
2  (iii) for property on which a bonus
3  depreciation deduction of 100% of the adjusted
4  basis was taken in a taxable year ending on or
5  after December 31, 2021, "x" equals the
6  depreciation deduction that would be allowed
7  on that property if the taxpayer had made the
8  election under Section 168(k)(7) of the
9  Internal Revenue Code to not claim bonus
10  depreciation on that property; and
11  (iv) for property on which a bonus
12  depreciation deduction of a percentage other
13  than 30%, 50% or 100% of the adjusted basis
14  was taken in a taxable year ending on or after
15  December 31, 2021, "x" equals "y" multiplied
16  by 100 times the percentage bonus depreciation
17  on the property (that is, 100(bonus%)) and
18  then divided by 100 times 1 minus the
19  percentage bonus depreciation on the property
20  (that is, 100(1-bonus%)).
21  The aggregate amount deducted under this
22  subparagraph in all taxable years for any one piece of
23  property may not exceed the amount of the bonus
24  depreciation deduction taken on that property on the
25  taxpayer's federal income tax return under subsection
26  (k) of Section 168 of the Internal Revenue Code. This

 

 

  SB0174 - 95 - LRB104 03806 HLH 13830 b


SB0174- 96 -LRB104 03806 HLH 13830 b   SB0174 - 96 - LRB104 03806 HLH 13830 b
  SB0174 - 96 - LRB104 03806 HLH 13830 b
1  subparagraph (O) is exempt from the provisions of
2  Section 250;
3  (P) If the taxpayer sells, transfers, abandons, or
4  otherwise disposes of property for which the taxpayer
5  was required in any taxable year to make an addition
6  modification under subparagraph (D-5), then an amount
7  equal to that addition modification.
8  If the taxpayer continues to own property through
9  the last day of the last tax year for which a
10  subtraction is allowed with respect to that property
11  under subparagraph (O) and for which the taxpayer was
12  required in any taxable year to make an addition
13  modification under subparagraph (D-5), then an amount
14  equal to that addition modification.
15  The taxpayer is allowed to take the deduction
16  under this subparagraph only once with respect to any
17  one piece of property.
18  This subparagraph (P) is exempt from the
19  provisions of Section 250;
20  (Q) The amount of (i) any interest income (net of
21  the deductions allocable thereto) taken into account
22  for the taxable year with respect to a transaction
23  with a taxpayer that is required to make an addition
24  modification with respect to such transaction under
25  Section 203(a)(2)(D-17), 203(b)(2)(E-12),
26  203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed

 

 

  SB0174 - 96 - LRB104 03806 HLH 13830 b


SB0174- 97 -LRB104 03806 HLH 13830 b   SB0174 - 97 - LRB104 03806 HLH 13830 b
  SB0174 - 97 - LRB104 03806 HLH 13830 b
1  the amount of such addition modification and (ii) any
2  income from intangible property (net of the deductions
3  allocable thereto) taken into account for the taxable
4  year with respect to a transaction with a taxpayer
5  that is required to make an addition modification with
6  respect to such transaction under Section
7  203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
8  203(d)(2)(D-8), but not to exceed the amount of such
9  addition modification. This subparagraph (Q) is exempt
10  from Section 250;
11  (R) An amount equal to the interest income taken
12  into account for the taxable year (net of the
13  deductions allocable thereto) with respect to
14  transactions with (i) a foreign person who would be a
15  member of the taxpayer's unitary business group but
16  for the fact that the foreign person's business
17  activity outside the United States is 80% or more of
18  that person's total business activity and (ii) for
19  taxable years ending on or after December 31, 2008, to
20  a person who would be a member of the same unitary
21  business group but for the fact that the person is
22  prohibited under Section 1501(a)(27) from being
23  included in the unitary business group because he or
24  she is ordinarily required to apportion business
25  income under different subsections of Section 304, but
26  not to exceed the addition modification required to be

 

 

  SB0174 - 97 - LRB104 03806 HLH 13830 b


SB0174- 98 -LRB104 03806 HLH 13830 b   SB0174 - 98 - LRB104 03806 HLH 13830 b
  SB0174 - 98 - LRB104 03806 HLH 13830 b
1  made for the same taxable year under Section
2  203(d)(2)(D-7) for interest paid, accrued, or
3  incurred, directly or indirectly, to the same person.
4  This subparagraph (R) is exempt from Section 250;
5  (S) An amount equal to the income from intangible
6  property taken into account for the taxable year (net
7  of the deductions allocable thereto) with respect to
8  transactions with (i) a foreign person who would be a
9  member of the taxpayer's unitary business group but
10  for the fact that the foreign person's business
11  activity outside the United States is 80% or more of
12  that person's total business activity and (ii) for
13  taxable years ending on or after December 31, 2008, to
14  a person who would be a member of the same unitary
15  business group but for the fact that the person is
16  prohibited under Section 1501(a)(27) from being
17  included in the unitary business group because he or
18  she is ordinarily required to apportion business
19  income under different subsections of Section 304, but
20  not to exceed the addition modification required to be
21  made for the same taxable year under Section
22  203(d)(2)(D-8) for intangible expenses and costs paid,
23  accrued, or incurred, directly or indirectly, to the
24  same person. This subparagraph (S) is exempt from
25  Section 250;
26  (T) For taxable years ending on or after December

 

 

  SB0174 - 98 - LRB104 03806 HLH 13830 b


SB0174- 99 -LRB104 03806 HLH 13830 b   SB0174 - 99 - LRB104 03806 HLH 13830 b
  SB0174 - 99 - LRB104 03806 HLH 13830 b
1  31, 2011, in the case of a taxpayer who was required to
2  add back any insurance premiums under Section
3  203(d)(2)(D-9), such taxpayer may elect to subtract
4  that part of a reimbursement received from the
5  insurance company equal to the amount of the expense
6  or loss (including expenses incurred by the insurance
7  company) that would have been taken into account as a
8  deduction for federal income tax purposes if the
9  expense or loss had been uninsured. If a taxpayer
10  makes the election provided for by this subparagraph
11  (T), the insurer to which the premiums were paid must
12  add back to income the amount subtracted by the
13  taxpayer pursuant to this subparagraph (T). This
14  subparagraph (T) is exempt from the provisions of
15  Section 250; and
16  (U) For taxable years beginning on or after
17  January 1, 2023, for any cannabis establishment
18  operating in this State and licensed under the
19  Cannabis Regulation and Tax Act or any cannabis
20  cultivation center or medical cannabis dispensing
21  organization operating in this State and licensed
22  under the Compassionate Use of Medical Cannabis
23  Program Act, an amount equal to the deductions that
24  were disallowed under Section 280E of the Internal
25  Revenue Code for the taxable year and that would not be
26  added back under this subsection. The provisions of

 

 

  SB0174 - 99 - LRB104 03806 HLH 13830 b


SB0174- 100 -LRB104 03806 HLH 13830 b   SB0174 - 100 - LRB104 03806 HLH 13830 b
  SB0174 - 100 - LRB104 03806 HLH 13830 b
1  this subparagraph (U) are exempt from the provisions
2  of Section 250.
3  (e) Gross income; adjusted gross income; taxable income.
4  (1) In general. Subject to the provisions of paragraph
5  (2) and subsection (b)(3), for purposes of this Section
6  and Section 803(e), a taxpayer's gross income, adjusted
7  gross income, or taxable income for the taxable year shall
8  mean the amount of gross income, adjusted gross income or
9  taxable income properly reportable for federal income tax
10  purposes for the taxable year under the provisions of the
11  Internal Revenue Code. Taxable income may be less than
12  zero. However, for taxable years ending on or after
13  December 31, 1986, net operating loss carryforwards from
14  taxable years ending prior to December 31, 1986, may not
15  exceed the sum of federal taxable income for the taxable
16  year before net operating loss deduction, plus the excess
17  of addition modifications over subtraction modifications
18  for the taxable year. For taxable years ending prior to
19  December 31, 1986, taxable income may never be an amount
20  in excess of the net operating loss for the taxable year as
21  defined in subsections (c) and (d) of Section 172 of the
22  Internal Revenue Code, provided that when taxable income
23  of a corporation (other than a Subchapter S corporation),
24  trust, or estate is less than zero and addition
25  modifications, other than those provided by subparagraph

 

 

  SB0174 - 100 - LRB104 03806 HLH 13830 b


SB0174- 101 -LRB104 03806 HLH 13830 b   SB0174 - 101 - LRB104 03806 HLH 13830 b
  SB0174 - 101 - LRB104 03806 HLH 13830 b
1  (E) of paragraph (2) of subsection (b) for corporations or
2  subparagraph (E) of paragraph (2) of subsection (c) for
3  trusts and estates, exceed subtraction modifications, an
4  addition modification must be made under those
5  subparagraphs for any other taxable year to which the
6  taxable income less than zero (net operating loss) is
7  applied under Section 172 of the Internal Revenue Code or
8  under subparagraph (E) of paragraph (2) of this subsection
9  (e) applied in conjunction with Section 172 of the
10  Internal Revenue Code.
11  (2) Special rule. For purposes of paragraph (1) of
12  this subsection, the taxable income properly reportable
13  for federal income tax purposes shall mean:
14  (A) Certain life insurance companies. In the case
15  of a life insurance company subject to the tax imposed
16  by Section 801 of the Internal Revenue Code, life
17  insurance company taxable income, plus the amount of
18  distribution from pre-1984 policyholder surplus
19  accounts as calculated under Section 815a of the
20  Internal Revenue Code;
21  (B) Certain other insurance companies. In the case
22  of mutual insurance companies subject to the tax
23  imposed by Section 831 of the Internal Revenue Code,
24  insurance company taxable income;
25  (C) Regulated investment companies. In the case of
26  a regulated investment company subject to the tax

 

 

  SB0174 - 101 - LRB104 03806 HLH 13830 b


SB0174- 102 -LRB104 03806 HLH 13830 b   SB0174 - 102 - LRB104 03806 HLH 13830 b
  SB0174 - 102 - LRB104 03806 HLH 13830 b
1  imposed by Section 852 of the Internal Revenue Code,
2  investment company taxable income;
3  (D) Real estate investment trusts. In the case of
4  a real estate investment trust subject to the tax
5  imposed by Section 857 of the Internal Revenue Code,
6  real estate investment trust taxable income;
7  (E) Consolidated corporations. In the case of a
8  corporation which is a member of an affiliated group
9  of corporations filing a consolidated income tax
10  return for the taxable year for federal income tax
11  purposes, taxable income determined as if such
12  corporation had filed a separate return for federal
13  income tax purposes for the taxable year and each
14  preceding taxable year for which it was a member of an
15  affiliated group. For purposes of this subparagraph,
16  the taxpayer's separate taxable income shall be
17  determined as if the election provided by Section
18  243(b)(2) of the Internal Revenue Code had been in
19  effect for all such years;
20  (F) Cooperatives. In the case of a cooperative
21  corporation or association, the taxable income of such
22  organization determined in accordance with the
23  provisions of Section 1381 through 1388 of the
24  Internal Revenue Code, but without regard to the
25  prohibition against offsetting losses from patronage
26  activities against income from nonpatronage

 

 

  SB0174 - 102 - LRB104 03806 HLH 13830 b


SB0174- 103 -LRB104 03806 HLH 13830 b   SB0174 - 103 - LRB104 03806 HLH 13830 b
  SB0174 - 103 - LRB104 03806 HLH 13830 b
1  activities; except that a cooperative corporation or
2  association may make an election to follow its federal
3  income tax treatment of patronage losses and
4  nonpatronage losses. In the event such election is
5  made, such losses shall be computed and carried over
6  in a manner consistent with subsection (a) of Section
7  207 of this Act and apportioned by the apportionment
8  factor reported by the cooperative on its Illinois
9  income tax return filed for the taxable year in which
10  the losses are incurred. The election shall be
11  effective for all taxable years with original returns
12  due on or after the date of the election. In addition,
13  the cooperative may file an amended return or returns,
14  as allowed under this Act, to provide that the
15  election shall be effective for losses incurred or
16  carried forward for taxable years occurring prior to
17  the date of the election. Once made, the election may
18  only be revoked upon approval of the Director. The
19  Department shall adopt rules setting forth
20  requirements for documenting the elections and any
21  resulting Illinois net loss and the standards to be
22  used by the Director in evaluating requests to revoke
23  elections. Public Act 96-932 is declaratory of
24  existing law;
25  (G) Subchapter S corporations. In the case of: (i)
26  a Subchapter S corporation for which there is in

 

 

  SB0174 - 103 - LRB104 03806 HLH 13830 b


SB0174- 104 -LRB104 03806 HLH 13830 b   SB0174 - 104 - LRB104 03806 HLH 13830 b
  SB0174 - 104 - LRB104 03806 HLH 13830 b
1  effect an election for the taxable year under Section
2  1362 of the Internal Revenue Code, the taxable income
3  of such corporation determined in accordance with
4  Section 1363(b) of the Internal Revenue Code, except
5  that taxable income shall take into account those
6  items which are required by Section 1363(b)(1) of the
7  Internal Revenue Code to be separately stated; and
8  (ii) a Subchapter S corporation for which there is in
9  effect a federal election to opt out of the provisions
10  of the Subchapter S Revision Act of 1982 and have
11  applied instead the prior federal Subchapter S rules
12  as in effect on July 1, 1982, the taxable income of
13  such corporation determined in accordance with the
14  federal Subchapter S rules as in effect on July 1,
15  1982; and
16  (H) Partnerships. In the case of a partnership,
17  taxable income determined in accordance with Section
18  703 of the Internal Revenue Code, except that taxable
19  income shall take into account those items which are
20  required by Section 703(a)(1) to be separately stated
21  but which would be taken into account by an individual
22  in calculating his taxable income.
23  (3) Recapture of business expenses on disposition of
24  asset or business. Notwithstanding any other law to the
25  contrary, if in prior years income from an asset or
26  business has been classified as business income and in a

 

 

  SB0174 - 104 - LRB104 03806 HLH 13830 b


SB0174- 105 -LRB104 03806 HLH 13830 b   SB0174 - 105 - LRB104 03806 HLH 13830 b
  SB0174 - 105 - LRB104 03806 HLH 13830 b
1  later year is demonstrated to be non-business income, then
2  all expenses, without limitation, deducted in such later
3  year and in the 2 immediately preceding taxable years
4  related to that asset or business that generated the
5  non-business income shall be added back and recaptured as
6  business income in the year of the disposition of the
7  asset or business. Such amount shall be apportioned to
8  Illinois using the greater of the apportionment fraction
9  computed for the business under Section 304 of this Act
10  for the taxable year or the average of the apportionment
11  fractions computed for the business under Section 304 of
12  this Act for the taxable year and for the 2 immediately
13  preceding taxable years.
14  (f) Valuation limitation amount.
15  (1) In general. The valuation limitation amount
16  referred to in subsections (a)(2)(G), (c)(2)(I) and
17  (d)(2)(E) is an amount equal to:
18  (A) The sum of the pre-August 1, 1969 appreciation
19  amounts (to the extent consisting of gain reportable
20  under the provisions of Section 1245 or 1250 of the
21  Internal Revenue Code) for all property in respect of
22  which such gain was reported for the taxable year;
23  plus
24  (B) The lesser of (i) the sum of the pre-August 1,
25  1969 appreciation amounts (to the extent consisting of

 

 

  SB0174 - 105 - LRB104 03806 HLH 13830 b


SB0174- 106 -LRB104 03806 HLH 13830 b   SB0174 - 106 - LRB104 03806 HLH 13830 b
  SB0174 - 106 - LRB104 03806 HLH 13830 b
1  capital gain) for all property in respect of which
2  such gain was reported for federal income tax purposes
3  for the taxable year, or (ii) the net capital gain for
4  the taxable year, reduced in either case by any amount
5  of such gain included in the amount determined under
6  subsection (a)(2)(F) or (c)(2)(H).
7  (2) Pre-August 1, 1969 appreciation amount.
8  (A) If the fair market value of property referred
9  to in paragraph (1) was readily ascertainable on
10  August 1, 1969, the pre-August 1, 1969 appreciation
11  amount for such property is the lesser of (i) the
12  excess of such fair market value over the taxpayer's
13  basis (for determining gain) for such property on that
14  date (determined under the Internal Revenue Code as in
15  effect on that date), or (ii) the total gain realized
16  and reportable for federal income tax purposes in
17  respect of the sale, exchange or other disposition of
18  such property.
19  (B) If the fair market value of property referred
20  to in paragraph (1) was not readily ascertainable on
21  August 1, 1969, the pre-August 1, 1969 appreciation
22  amount for such property is that amount which bears
23  the same ratio to the total gain reported in respect of
24  the property for federal income tax purposes for the
25  taxable year, as the number of full calendar months in
26  that part of the taxpayer's holding period for the

 

 

  SB0174 - 106 - LRB104 03806 HLH 13830 b


SB0174- 107 -LRB104 03806 HLH 13830 b   SB0174 - 107 - LRB104 03806 HLH 13830 b
  SB0174 - 107 - LRB104 03806 HLH 13830 b
1  property ending July 31, 1969 bears to the number of
2  full calendar months in the taxpayer's entire holding
3  period for the property.
4  (C) The Department shall prescribe such
5  regulations as may be necessary to carry out the
6  purposes of this paragraph.
7  (g) Double deductions. Unless specifically provided
8  otherwise, nothing in this Section shall permit the same item
9  to be deducted more than once.
10  (h) Legislative intention. Except as expressly provided by
11  this Section there shall be no modifications or limitations on
12  the amounts of income, gain, loss or deduction taken into
13  account in determining gross income, adjusted gross income or
14  taxable income for federal income tax purposes for the taxable
15  year, or in the amount of such items entering into the
16  computation of base income and net income under this Act for
17  such taxable year, whether in respect of property values as of
18  August 1, 1969 or otherwise.
19  (Source: P.A. 102-16, eff. 6-17-21; 102-558, eff. 8-20-21;
20  102-658, eff. 8-27-21; 102-813, eff. 5-13-22; 102-1112, eff.
21  12-21-22; 103-8, eff. 6-7-23; 103-478, eff. 1-1-24; 103-592,
22  Article 10, Section 10-900, eff. 6-7-24; 103-592, Article 170,
23  Section 170-90, eff. 6-7-24; 103-605, eff. 7-1-24; 103-647,
24  eff. 7-1-24; revised 8-20-24.)

 

 

  SB0174 - 107 - LRB104 03806 HLH 13830 b


SB0174- 108 -LRB104 03806 HLH 13830 b   SB0174 - 108 - LRB104 03806 HLH 13830 b
  SB0174 - 108 - LRB104 03806 HLH 13830 b

 

 

  SB0174 - 108 - LRB104 03806 HLH 13830 b